Volkswagen Financial Services Pty Ltd v Alhwesh
[2025] FedCFamC2G 485
•7 April 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Volkswagen Financial Services Pty Ltd v Alhwesh [2025] FedCFamC2G 485
File number: PEG 450 of 2024 Judgment of: JUDGE LADHAMS Date of judgment: 7 April 2025 Catchwords: CONSUMER LAW – application for orders under s 123 of the Personal Property Securities Act 2009 (Cth) to enter property to seize a vehicle the subject of a security interest registered on the Personal Property Securities Register Legislation: Personal Property Securities Act 2009 (Cth) ss 10, 12, 123, 206, 207 Cases cited: Riseley v Toyota Finance Australia Ltd [2021] FCA 1566
Senworth Capital Pty Ltd v Galleria SUV Pty Ltd [2022] NSWSC 1513
Volkswagen Financial Services Australia Pty Limited v Tate [2024] FedCFamC2G 491
Volkswagen Financial Services Pty Ltd v Glass Shop Perth Pty Ltd [2024] FedCFamC2G 537
Division: Division 2 General Federal Law Number of paragraphs: 21 Date of hearing: 4 April 2025 Place: Perth (via Microsoft Teams) Counsel for the Applicant: Mr J Falconer Solicitor for the Applicant: Wallmans Lawyers Respondent: The respondent appeared in person ORDERS
PEG 450 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA PTY LTD ACN 097 071 460
Applicant
AND: MOHAMED ALHWESH
Respondent
ORDER MADE BY:
JUDGE LADHAMS
DATE OF ORDER:
4 APRIL 2025
THE COURT ORDERS THAT:
1.Pursuant to Section 123(1) of the Personal Property Securities Act 2009 (Cth), the respondent and/or any party in possession of the Collateral, being a grey 2016 BMW M3 Sedan Motor Vehicle VIN: WBS8M920X05E22008, Engine Number: 01949649 and Registration Number: 1HTN594 (WA) (hereafter the Collateral), deliver, surrender and/or provide the location of the Collateral to the applicant and/or its agent.
2.The applicant and/or its duly authorised agent be permitted to enter onto, and remain at, and to take any and all reasonable step(s) in order to locate and take possession of the Collateral from the following premises:
a)X XXXXX XXX Lane, XXXXX XXXXX XXXX in the State of Western Australia;
b)XX XXXX XXXX Ramble, XXXXX XX XXXX in the State of Western Australia; and
c)any other premises in Australia over which the respondent has apparent control and at which the Collateral is reasonably believed to be located.
3.The respondent pay the applicant’s costs fixed in the sum of $4,060.00.
4.Reasons for these orders will be published from chambers at a later date.
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 LADHAMS:
INTRODUCTION
The applicant and respondent entered into a loan agreement for the purchase of a motor vehicle by the respondent. The motor vehicle is a grey 2016 BMW M3 sedan, VIN: WBS8M920X05E22008, Engine Number: 01949649 and Registration Number: 1HTN594 (WA) (the Collateral). The respondent defaulted on his obligations under the loan agreement and the applicant commenced proceedings in this Court on 22 November 2024.
When the matter came before me on 4 April 2025, I made the following orders:
1.Pursuant to Section 123(1) of the Personal Property Securities Act 2009 (Cth), the respondent and/or any party in possession of the Collateral, being a grey 2016 BMW M3 Sedan Motor Vehicle VIN: WBS8M920X05E22008, Engine Number: 01949649 and Registration Number: 1HTN594 (WA) (hereafter the Collateral), deliver, surrender and/or provide the location of the Collateral to the applicant and/or its agent.
2.The applicant and/or its duly authorised agent be permitted to enter onto, and remain at, and to take any and all reasonable step(s) in order to locate and take possession of the Collateral from the following premises:
a) X XXXXX XXX Lane, XXXXX XXXXX XXXX in the State of Western Australia;
b)XX XXXX XXXX Ramble, XXXXX XX XXXX in the State of Western Australia; and
c)any other premises in Australia over which the respondent has apparent control and at which the Collateral is reasonably believed to be located.
3. The respondent pay the applicant’s costs fixed in the sum of $4,060.00.
4. Reasons for these orders will be published from chambers at a later date.
These are the reasons referred to in order 4.
PROCEDURAL HISTORY BEFORE THIS COURT
The applicant commenced proceedings in this Court on 22 November 2024 by filing an application together with an affidavit of Vicki Janelle Coombe.
The matter first came before the Court on 12 February 2025. On that occasion the applicant appeared via a lawyer and there was no appearance by or for the respondent. I was not satisfied on that occasion that the application and affidavit in support had been properly served on the respondent and I made an Order which adjourned the directions hearing until 4 April 2025, required the applicant to serve documents on the respondent and required the respondent to file a notice of address for service and to appear or cause an appearance to be made at the directions hearing on 4 April 2025.
The respondent did not file a notice of address for service and he did not file any response to the application.
When the matter came before the Court for directions on 4 April 2025, the applicant was represented by a lawyer and the respondent appeared as a self-represented litigant. When the respondent had difficulties understanding at the commencement of the directions hearing, the matter was stood down to enable the Court to engage an interpreter and, after a short delay, the matter proceeded with the respondent being assisted by an interpreter in the Arabic and English languages.
I took the opportunity at the directions hearing to explain to the respondent the orders sought by the applicant and he confirmed that he understood them. The respondent indicated that he was content to return the Collateral to the applicant, but had hoped to repair and sell it, and give the money to the applicant. The respondent also referred to some difficulties that he has had in the recent past (which, in the interests of privacy, I do not set out in this judgment), and that he wishes to start making payments again from June 2025. I explored with the respondent whether he agreed to the Court making the orders sought by the applicant at the directions hearing, or whether he wanted an opportunity to file evidence and submissions and defend the matter, in which case, it would be listed for hearing on a different day. After some discussion, the respondent clearly indicated that he was content for the Court to make the orders sought by the applicant.
Having regard to the evidence before the Court and the position of the parties, I agreed that it was appropriate to make the orders sought by the applicant, with some minor modifications.
FACTUAL BACKGROUND
The factual matters relevant to the resolution of this proceeding are set out in the affidavit of Vicki Janelle Coombe filed on 22 November 2024. Based on this affidavit, I am satisfied that:
(a)On 21 January 2023 the respondent signed a contract with the applicant to finance the purchase of the Collateral (Agreement). The respondent borrowed the sum of $66,855.00 and was required to repay the loan amount plus interest by way of 59 monthly payments of $1,510.57 and one final repayment of $1,510.42.
(b)The applicant registered a security interest against the Vehicle on the Personal Property Securities Register (PPSR) on 24 January 2023.
(c)The applicant issued a default notice to the respondent on 12 December 2023, indicating that there was a balance outstanding of $1,580.57 and requiring the default to be rectified within 14 days.
(d)The respondent did not rectify the default in the time specified in the default notice or at all.
(e)The applicant took numerous steps to liaise with the respondent and give him an opportunity to rectify the default before commencing proceedings in this Court.
(f)A loan account statement dated 1 October 2024 shows an outstanding balance of $69,339.75, with the last monthly instalment payment by the applicant made on 21 February 2024, before being dishonoured, and the last monthly instalment payment that was not dishonoured being made on 21 October 2023.
APPLICATION FOR RELIEF UNDER THE PERSONAL PROPERTY SECURITIES ACT 2009 (CTH)
Jurisdiction of the Court
The applicant seeks an order under s 123 of the Personal Property Securities Act 2009 (Cth) (PPS Act). Subsection 123(1) of the PPS Act provides:
A secured party may seize collateral, by any method permitted by law, if the debtor is in default under the security agreement.
Justice Besanko considered whether the Federal Circuit Court had jurisdiction to make orders similar to those sought by the applicant in the present case in Riseley v Toyota Finance Australia Ltd [2021] FCA 1566 (Riseley). In that judgment, his Honour said at [19]-[22]:
19.As I have said, I raised the question of the power of the Federal Circuit Court to make the orders with the solicitor for Toyota Finance. I did so because the first order of the Federal Circuit Court states that it was made pursuant to s 123 of the Act. That section provides, relevantly:
(1)A secured party may seize collateral, by any method permitted by law, if the debtor is in default under the security agreement.
Note: For seizure of accessions, see sections 95 to 97.
On the face of it, this section gives the secured party a right which it may exercise, not power or jurisdiction to the Court.
20.Section 206 of the Act provides that Part 6.2 deals with the jurisdiction of a court with respect to a matter (a PPS matter) arising under a provision of this Act authorising an application to be made to a court; or otherwise arising in relation to this Act; or otherwise arising in relation to a security agreement or a security interest. By reason of s 207, jurisdiction with respect to a PPS matter is conferred on the Federal Circuit Court subject to the limit of the Court’s jurisdiction in terms of an award not exceeding $750,000 or such other amount as may be prescribed by regulations. Section 10 defines a PPS matter as having the meaning given by s 206 of the Act.
21.Toyota Finance referred to the decision of the Supreme Court of New South Wales in Bank of Queensland Limited v Star Trek Pty Ltd [2019] NSWSC 1712 (Bank of Queensland v Star Trek) in which Adamson J said that there was support for a secured party who falls within s 123 approaching the Court to obtain authority from the Court that its methods are unquestionably “permitted by law” within the meaning of s 123. Justice Adamson considered that there was support for the bank’s approach in Duggan A and Brown D, Australian Personal Property Securities Law (2nd ed, 2016, LexisNexis Butterworths) at [12.36]. In the circumstances, her Honour considered that the secured creditor in that case had established a right to declarations in property and an entitlement to seize property. In this case, declarations were not actually made by the Federal Circuit Court, but it seems that declarations could have been made following the authority of Bank of Queensland v Star Trek. Justice Adamson went on to say that where it was necessary to gain entry and access to property for the purposes of seizing it, the debtor could be restrained from preventing the secured party from doing those acts. Her Honour said (at [18]):
I regard these orders as appropriate ancillary orders to permit the Bank to enforce its security, to require Star Trek to allow this to occur and to require the Trustee to grant entry and access to the Matraville property for that purpose.
22.I consider the orders made in this case to be in the nature of orders which follow from declarations that could have been made by the Court had they been sought. A similar approach has been adopted in other cases: BOQ Credit Pty Ltd v Chatah [2017] NSWSC 1444; Porter Equipment Australia Pty Ltd & anor v Barton Ventures Pty Ltd & anor; Porter Equipment Australia Pty Ltd v Tyremil Pty Ltd & ors [2018] QDC 87. In the circumstances, it seems that there was power to make the order.
I am satisfied, based in part on Besanko J’s reasoning in Riseley, that this Court has jurisdiction to consider granting to the applicant the relief sought in this proceeding under the PPS Act. This Court, like the previous Federal Circuit Court, has jurisdiction with respect to a ‘PPS matter’, subject to a limit on its jurisdiction preventing it from awarding an amount for loss or damage that exceeds $750,000: item 2, s 207 of the PPS Act. ‘PPS matter’ is defined in s 206(1) in the following way:
This Part deals with the jurisdiction of a court with respect to a matter (a PPS matter):
(a) arising under a provision of this Act authorising an application to be made to a court; or
(b)otherwise arising in relation to this Act, other than a matter in respect of which the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) has jurisdiction under the Administrative Decisions (Judicial Review) Act 1977; or
(c)otherwise arising in relation to a security agreement or a security interest.
I am satisfied that the present application relates to a ‘PPS matter’.
Consideration of the application
Based on the terms of s 123 of the PPS Act, I have considered whether the applicant is a ‘secured party’, whether the Collateral is ‘collateral’, whether the Agreement is a ‘security agreement’ and whether the respondent is in default under that Agreement.
Having regard to the affidavit of Ms Coombe, including the partial copy of the Agreement annexed to that affidavit, I am satisfied that the Agreement is a ‘security agreement’ as defined in s 10 of the PPS Act and that the applicant has a ‘security interest’, as defined in s 12 of the PPS Act, in relation to the Collateral. I am also satisfied that the applicant is a ‘secured party’ within the meaning of s 10 of the PPS Act and that the Collateral falls within the definition of ‘collateral’ in s 10 of the PPS Act.
I am satisfied based on the affidavit of Ms Coombe that the respondent has defaulted on his obligation under the Agreement to make repayments.
It is also appropriate to consider whether the method by which the applicant wishes to seize the Collateral is one permitted by law. Section 123 of the PPS Act only authorises the seizure of collateral by methods permitted by law.
The applicant seeks to be permitted to enter and remain on premises for the purpose of taking reasonable steps to locate and take possession of the Collateral. The address referred to in the application was an address recorded in the Agreement as being the address of the respondent. At the directions hearing on 4 April 2025, the respondent provided a further address, indicating that he now resides at that address and that is where the Collateral is located. The respondent confirmed that he agreed to those premises being included in the order and I am satisfied that is appropriate, on the basis of the representations of the respondent at the directions hearing. The applicant also sought to be able to enter ‘any other premises in Australia at which the Collateral is reasonably believed to be located’. At the hearing, the applicant’s lawyer agreed to the Court’s proposal to modify that to the form of order made, as indicated above. This addresses the caution of Fagan J in Senworth Capital Pty Ltd v Galleria SUV Pty Ltd [2022] NSWSC 1513 against the making of orders that may interfere with third parties’ rights or amount to trespass without joining the third parties as defendants. It is consistent with the approach taken by judges of this Court in some other cases, including Volkswagen Financial Services Australia Pty Limited v Tate [2024] FedCFamC2G 491 and Volkswagen Financial Services Pty Ltd v Glass Shop Perth Pty Ltd [2024] FedCFamC2G 537.
The respondent indicated at the directions hearing that he wanted the applicant to contact him to make arrangements to enter the property to collect the Collateral. The applicant’s lawyer expressed some concerns at this. It has been explained to the respondent that the orders do not require the applicant to make prior arrangements with him. This, of course, does not prevent the applicant from contacting the respondent prior to entering the premises, nor does it prevent the respondent from proactively making arrangements with the applicant for the return of the Collateral.
Finally, the respondent made submissions at the directions hearing in relation to his current inability to pay the outstanding amounts under the Agreement, and his desire to resume payments from June 2025. As noted by the lawyer for the applicant, this proceeding does not relate to the payment of monetary sums. I ensured at the directions hearing that the respondent understood that if the Court made the orders sought by the applicant in this application, he would still have an obligation to pay the amounts outstanding under the Agreement and the respondent indicated that he understood this. It is open to the parties to negotiate to see if any agreement can be reached in relation to the how and when any outstanding amounts ought to be repaid.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Ladhams. Associate:
Dated: 7 April 2025
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