Volkswagen Financial Services Pty Ltd v Sivapathasuntharam
[2024] FedCFamC2G 561
•21 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Volkswagen Financial Services Pty Ltd v Sivapathasuntharam [2024] FedCFamC2G 561
File number(s): SYG 1016 of 2024 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 21 June 2024 Catchwords: CONSUMER LAW – Application for orders under s 100 and s 101 of the National Credit Code for the delivery of a motor vehicle – whether evidence supports making order for entry into any premises – order made requiring respondent to deliver vehicle with liberty to apply for an order under s 100 of the Code if the respondent does not comply with the order for delivery. Legislation: Civil Dispute Resolution Act 2011 (Cth) s 5
National Consumer Credit Protection Act 2009 (Cth) Sch 1, ss 5, 88(1), 100, 101, 204
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 1.05, 6.06, 6.07, 6.14Division: General Number of paragraphs: 24 Date of hearing: 18 June 2024 Place: Sydney Solicitor for the Applicant: Mr B O’Sullivan of Celtic Legal, for the applicant, by telephone Solicitor for the Respondent: In person, by telephone ORDERS
SYG 1016 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: RUMESH SIVAPATHASUNTHARAM
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
21 JUNE 2024
THE COURT ORDERS THAT:
1.Pursuant to r 6.14 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2011 (Cth), the application is to be taken to have been served on the respondent by email sent on 29 May 2024.
2.Pursuant to s 101 of Schedule 1 (Code) to the National Consumer Credit Protection Act 2009 (Cth) the respondent deliver to the applicant the following vehicle (Vehicle) together with all keys to the Vehicle:
Type:2022 Volkswagen T-Cross
VIN:WVGZZZC1ZNY107835
3.The respondent deliver the Vehicle and keys to the Vehicle to the applicant at a time, date, and place the applicant nominates and communicates to the respondent, being a time and date that is no earlier than 2 August 2024.
4.The applicant have liberty to apply for an order pursuant to s 100 of the Code if the respondent fails to comply with orders 2 and 3.
5.As to costs:
(i)by 5 July 2024 the applicant file and serve short submissions on costs;
(ii)by 19 July 2024 the respondent may file and serve short submissions on costs; and
(iii)the question of costs be determined on the papers.
6.The parties otherwise have liberty to apply on such notice as the circumstances warrant, such liberty to extent to any issue that may arise in relation to the implementation of these orders.
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) applies for, among other things, an order under s 101 of Schedule 1 (Code) to the National Consumer Credit Protection Act 2009 (Cth) that the respondent, Mr Sivapathasuntharam, deliver to VFSA’s agent a 2022 Volkswagen T-Cross (Vehicle), and an order under s 100 of the Code that VFSA have access to residential premises for the purpose of enabling it to repossess the Vehicle.
PROCEDURAL HISTORY
The VFSA filed its application with the Sydney Registry on 23 May 2024 and, on its being filed, was listed for a first court date before me at 9.30 am on 18 June 2024.
There are three affidavits of service of the application and the supporting affidavit made by Mr Long, the lawyer for VSFA.
(a)The first is made by Mr C N Thurbon on 8 June 2024. Mr Thurbon deposes that at 10.36 am on 5 June 2024 he “left the document at the front door of the property in a sealed envelope address to RYUMESH SIVAPATHASUNTHARAM”. The documents to which Mr Thurbon refers are the application and the affidavit of Mr Long; and the “property” to which Mr Thurbon refers is a property in Baulkham Hills, New South Wales (Baulkham Hills premises).
(b)The second affidavit was made on 14 June 2024 by Mr M D P Kumar, a paralegal from the office of Mr Long. Mr Kumar deposes that on 29 May 2024 he served by email to Mr Sivapathasuntharam’s email address the application and affidavit of Mr Long under cover of a letter which stated an address at Pennant Hills, being Mr Sivapathasuntharam’s address stated in the Loan Contract (Pennant Hills premises).
(c)A third affidavit was made, also on 14 June 2024, by Ms T Lorenzen-Taylor, who describes herself as an “Administration Officer”, who I infer is employed within Mr Long’s office. Ms Lorenzen-Taylor deposes that at approximately 4:00 pm on 29 May 2024 she served Mr Sivapathasuntharam the application and affidavit of Mr Long under cover of a letter which she sent by post to the Pennant Hills premises.
It is not clear from these affidavits which of the Baulkham Hills or the West Pennant Hills premises is the residential address of Mr Sivapathasuntharam. Further, none of the affidavits of service evidence personal service of the application on Mr Sivapathasuntharam. Rule 6.06 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules) relevantly provides that “[s]ervice by hand is required for an application starting a proceeding”. “Service by hand” is defined in r 1.05 to mean “personal service”. Rule 6.07 of the GFL Rules specifies how service by hand may be effected on an individual:
(1)A person serving a document by hand on an individual must give a copy of the document to the person to be served.
(2)(2) However, if the person to be served does not take the copy of the document, the person serving it may put it down in the presence of the person to be served and tell the person what it is.
At the first court date, Mr O’Sullivan appeared by telephone on behalf of VFSA and the respondent, Mr Sivapathasuntharam, appeared on his own behalf. In the course of the hearing, Mr Sivapathasuntharam confirmed he had received documents VFSA had filed in this proceeding, and that he understood VFSA was seeking an order for the return of the Vehicle. Thus, even though the application was not served by hand on Mr Sivapathasuntharam, he nevertheless received notice of the proceeding.
Mr Sivapathasuntharam confirmed that he has been in default since around October 2022, but he said he had submitted to VFSA a payment proposal which VFSA did not accept. Mr Sivapathasuntharam said he and his family needed the Vehicle, and he would like to make a further payment proposal to VFSA. After further discussion I asked Mr O’Sullivan what his client’s intentions were in relation to the matter. Mr O’Sullivan said he was instructed to proceed to apply for the orders set out in a document titled “Proposed Orders”, which reflect the substance of the orders VFSA claims in its application.
Given Mr Sivapathasuntharam did not suggest he had any defence to VFSA’s claims, and I had listed before me an interlocutory hearing in another matter, I informed Mr O’Sullivan and Mr Sivapathasuntharam that I proposed to invite Mr O’Sullivan to read the evidence on which he intended to rely, and then to reserve my judgment, on the basis that I would make orders later in the day. I also indicated that if, as appeared likely, I were to find that VFSA would be entitled to orders for the recovery of the Vehicle, I would make such orders and stay their operation for six weeks to give Mr Sivapathasuntharam an opportunity to reach an agreement with VFSA or to arrange to acquire an alternative vehicle. After some further discussion, Mr O’Sullivan read the affidavits on which he relied, and I reserved my judgment on VFSA’s application.
In these reasons for judgment I consider whether VFSA is entitled to any of the orders it seeks.
FACTS
On about 10 September 2022 Mr Sivapathasuntharam signed a “Consumer Loan Contract” (Loan Contract), which begins as follows:
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 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 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 “Goods described below” is the Vehicle.
The Loan Contract is expressed to be an offer by Mr Sivapathasuntharam to VFSA that VFSA lend Mr Sivapathasuntharam $41,373 to pay the purchase of the Vehicle for $40,000, and other items. The Loan Contract provided that the loan would be repaid over 60 months, in monthly instalments, the first 50 monthly instalments each being $791.83, and the last instalment being $10,792.22; and it also provided that Mr Sivapathasuntharam give a mortgage over the Vehicle to VFSA to secure his obligations under the Loan Contract. Mr Sivapathasuntharam signed the Loan Contract on 10 September 2022 and, by so doing, was bound by the terms of the Loan Contract, and also by the “Terms and Conditions”, being the terms contained in a document titled “Chattel Loan and Mortgage” (Mortgage).
On 12 September 2022 VFSA registered its security interest in the Vehicle with the Personal Property Securities Register.
By October 2022 Mr Sivapathasuntharam defaulted; and, on 29 October 2022, VFSA issued a default notice in which VFSA stated that Mr Sivapathasuntharam was in default in that VFSA had not received payment; demanded that Mr Sivapathasuntharam remedy the default by 5 December 2022 by paying VFSA $826.83; that, if the default is not remedied, the total outstanding amount under the Loan Contract will become immediately due and payable; that VFSA may begin enforcement proceedings to recover the amount outstanding; and VFSA may “begin repossession of” the Vehicle.
Mr Sivapathasuntharam did not remedy the default. That had the consequence, among other things, of entitling VFSA under cl 9.3 (e) of the Mortgage to “enter any premises and take possession of” the Vehicle.
It may be taken that VFSA issued the default notice pursuant to s 88(1) of the Code, which provides:
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
(d)if the mortgage secures an obligation under a credit contract 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 mortgagor 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 mortgagor;
(ii) a practising lawyer representing the mortgagor;
(iii) a person with a power of attorney relating to the mortgagor’s financial affairs.
Criminal penalty: 50 penalty units.
It may also be taken that VFSA issued the notice because it accepts that the Code applies to the Loan Contract and the Mortgage, and that the Code does so because s 5(1) of the Code applies to the Loan Contract and the Mortgage. Subsection 5(1) of the Code provides:
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; or
(ii)to purchase, renovate or improve residential property for investment purposes; or
(iii)to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes; and
(c) a charge is or may be made for providing the credit; and
(d)the credit provider provides the credit in the course of a business of providing credit carried on in this jurisdiction or as part of or incidentally to any other business of the credit provider carried on in this jurisdiction.
“Enforcement proceeding” is defined in s 204 of the Code to mean:
(a)for a credit contract, consumer lease or guarantee—proceedings in a court to recover a payment due under the contract, lease or guarantee; or
(b)for a consumer lease or mortgage—taking possession of property under the lease or mortgage; or
(c)for a mortgage—taking any other action to enforce the mortgage.
ORDERS SOUGHT
VFSA seeks the following orders:
1.Pursuant to s 100 of the National Credit Code (Code), the Applicant is authorised, by itself, its servants or agents, to enter residential premises for the purpose of taking possession of the 2022 Volkswagen T-Cross, bearing the below identifiers (Vehicle) and any keys to the Vehicle:
(a) VIN: WVGZZZC1ZNY107835; and
(b) Engine No: DKJ126897.
2. Pursuant to s 101 of the Code the Respondent is required to deliver the Vehicle (and any keys to the Vehicle) to the Applicant, or its lawfully appointed agent, at such time and at an address nominated by the Applicant.
3. The Applicant and/or its duly authorised agent is permitted to enter and remain on any residential premises/land and is further authorised to take any and all steps reasonable and necessary in order to take possession of the Vehicle from the following premises:
(a) [Baulkham Hills premises]; and
(b) any other residential premises in Australia at which the Vehicle is reasonably believed to be located.
4. The Respondent pay the Applicant’s costs fixed in the sum of $3,277.00.
Section 100 of the Code provides:
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.
Section 101 of the Code provides:
(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.
(2)The court may, on the application of a credit provider or other person required to deliver goods to a credit provider, by order vary the place at which or time or period within which goods must be delivered to the credit provider.
(3)A person who contravenes an order under this section commits an offence.
The applications provided for by each of s100 and s 101 are “enforcement proceedings” within the definition of “enforcement proceedings” given in s 204 of the Code; and I am satisfied VFSA was entitled to commence, and is entitled to maintain this proceeding.
There are, however, difficulties with the orders VFSA seeks. First, the orders, if made, would authorise entry on to the Baulkham Hills premises. Given that the affidavits of service refer to both the Baulkham Hills and the West Pennant Hills premises, and the Loan Contract identifies the West Pennant Hills premises as Mr Sivapathasuntharam’s address, I cannot be satisfied as to which, if any, of the Baulkham Hills or the West Pennant Hills premises are Mr Sivapathasuntharam’s address. Second, the orders, if made, would authorise VFSA to enter any premises, whether or not they are premises Mr Sivapathasuntharam occupies. That is not an order that can be made without the premises first being identified, and without notice first being given to the occupier of those premises.
DISPOSITION
In these circumstances, I will make the following orders:
(a)An order pursuant to r 6.14 of the GFL Rules that the application is to be taken to have been served with the application by no later than 29 May 2024.
(b)An order that Mr Sivapathasuntharam deliver the Vehicle (and all keys) to VFSA at a time and place nominated by VFSA, such time and place to be no earlier than 2 August 2024.
(c)An order granting VFSA liberty to apply for an order under s 100 of the Code if Mr Sivapathasuntharam does not deliver the Vehicle by the nominated time.
(d)An order granting the parties liberty to apply, such liberty to extend to any issue that may arise in relation to the implementation of the orders I will pronounce.
As for costs, I will direct that VFSA file and serve short written submission in support of its application for costs. VFSA should address in its submissions whether the Civil Dispute Resolution Act 2011 (Cth) applies to this proceeding and, if so, whether VFSA has complied with s 5 of that Act and, if not, whether an order for costs should be made in its favour. I will provide Mr Sivapathasuntharam with an opportunity to file and serve short written submissions in reply; and I will order that I determine the question for costs on the papers.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 21 June 2024
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