Williams v Toyota Finance Australia Limited
[2000] QDC 439
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- Unreported Judgment
- Williams v Toyota Finance Australia Limited[2000] QDC 439
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Williams v Toyota Finance Australia Limited[2000] QDC 439
Williams v Toyota Finance Australia Limited[2000] QDC 439
DISTRICT COURT OF QUEENSLAND
CITATION: | David J. Williams v. Toyota Finance Australia Limited [2000] QDC 439 |
PARTIES: | DAVID J. WILLIAMS and LEA-ANNE WILLIAMS (Applicants) v TOYOTA FINANCE AUSTRALIA LIMITED (Respondent)
HOLIDAY LINK NQ PTY LTD and ROWLAND GOLDSBOROUGH (Third Parties) |
FILE NO/S: | No 497 of 1999 |
DIVISION: | Trial |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court at Cairns |
DELIVERED ON: | 28 August 2000 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 August 2000 |
JUDGE: | Skoien SJDC |
ORDER: | Application dismissed. |
CATCHWORDS: | Uniform Civil Procedure Rules, r. 668, constitution of court – registration of hire purchase agreement under Motor Vehicles Securities Act 1986 – Breach of s. 3(1) of Hire Purchase Act 1959. |
COUNSEL: | E. Morzone for the applicants Philp for the respondent |
SOLICITORS: | Miller Harris for the applicants Clayton Utz for the respondent |
- [1]The applicants (Williams) apply:
- (a)to stay the effect of an order of His Honour Judge White made on 6 April, 2000 when he allowed an appeal by the respondent (Toyota Finance) from a decision of the Magistrates Court and gave summary judgment for Toyota Finance against Williams;
- (b)for a direction that a trial of the proceedings occur in the Magistrates Court pursuant to rules 668(2) and 668(3)(a) of the Uniform Civil Procedures Rules (UCPR);
or:
- (c)or to set aside the order pursuant to rule 668(3)(b).
Action & Appeal
- [2]Toyota Finance sued Williams in conversion and detinue arising out of the purchase by Williams in April 1998 of a car from the first third party (Holiday Link). Toyota Finance relied upon a hire purchase agreement over the car between it as owner and Deflectell Pty Ltd, (a name by which Holiday Link was previously registered) as hirer as a valid registered security interest under the Motor Vehicles Securities Act 1986 (MVSA). Toyota Finance brought a summary judgment application for recovery of the car from Williams, which was refused by Mr. Glasgow SM.
- [3]Toyota Finance appealed against that decision and Williams resisted the appeal on the grounds that there was a defence requiring a trial of the action. The appeal turned on the question whether discrepancies in the registered details of the car vitiated the registration. On 6 April 2000, His Honour Judge White allowed the appeal and ordered the return of the car to Toyota Finance. In his reasons for judgment, His Honour accepted the following (then undisputed) evidence:
(a)Toyota Finance purchased the car from Bridge Autos Pty Ltd;
(b)Toyota Finance then hired the car to Deflectell under a valid hire purchase agreement dated 12 February 1997;
(c)On 26 February 1997 Toyota Finance registered its interest under the hire purchase agreement under MVSA and thereupon s. 13 of MVSA gave notice to all the world (including Williams) of Toyota Finance’s interest by way of ownership of the car. So the subsequent purported sale of the car by Holiday Link to Williams did not displace the interest of Toyota Finance as owner of the car and, as against Williams, the right of Toyota Finance to possession of it.
- [4]It was submitted by Mr. Morzone of counsel on behalf of Williams that facts have become known to Williams after His Honour Judge White’s order which:
(a)entitle Williams to be relieved from the order: (r. 668(1)(a)); and
- (b)would have entitled Williams to an order sending the action to trial to determine the existence and validity of the hire purchase agreement: r. 688(1)(b).
New Facts
- [5]Committal proceedings for an alleged offence were held in relation to the second third party, Goldsborough, on 23 May 2000 that is, after the order of His Honour Judge White. During the course of the committal, the following evidence was given:
(a)The prerequisite Schedule 1 Statement under the Hire Purchase Act 1959 (HPA) was not provided to Deflectell before the offer was made to enter into the hire purchase agreement; and
- (b)the document purporting to be the hire purchase agreement was signed in blank by Deflectell.
- [6]This evidence was not known to Williams at the time of the appeal before His Honour Judge White since the committal occurred after his orders were made. The evidence was capable, submitted Mr Morzone, of leading to a finding that the “hire purchase agreement” was not a proper hire purchase agreement under HPA and therefore incapable of registration under MVSA. It would follow that any interest in the car on the part of Toyota Finance would not be protected by the purported registration, Williams would not be deemed to have notice of it and as purchasers in good faith for value without notice Williams acquired the car free of any interest on the part of Toyota Finance.
Statutory Provisions
- [7]The following relevant provisions appear in HPA:
“3(1) Before any hire-purchase agreement is entered into in
respect of any goods the owner or, if there is a dealer, the dealer shall give or cause to be given to the prospective hirer a written statement duly completed in accordance with the form in schedule 1.
(1A)However, where the written agreement is entered into by way of acceptance by the owner of a written offer signed by or on behalf of the hirer, the provisions of subsection (1) shall be deemed not to have been complied with unless the written statement was given to the prospective hirer before the written offer was so signed.
- (2)Every hire-purchase agreement
- (a)shall be in writing; and
- (b)shall be signed by or on behalf of the hirer and all other parties to the agreement;
(hereafter are set out some sixteen requirements for details to be included in the agreement)
.....................
(4) An owner who enters into a hire-purchase agreement that does not comply with subsection (2) shall be guilty of an offence against this Act.
(5)Without affecting the liability of any person to be convicted of an offence against this section, where a provision of this section has not been complied with in relation to a hire-purchase agreement (not being a failure to comply with subsection (2)(a)), the liability of the hirer shall be reduced by the amount included in the hire-purchase agreement for terms charges.
(6)A hire-purchase agreement that is not in writing shall not be enforceable by the owner and all right, title and interest of the owner to or in the goods comprised in the hire-purchase agreement and any right of action in the owner under the hire-purchase agreement shall absolutely cease and determine.”
- [8]Schedule 1 to HPA sets out a summary of the proposed hirers obligations under the proposed agreement. For example, it describes the goods, sets out its cash price, the amount of terms charges (ie., interest), the total amount which the hirer will pay and the amount of each instalment.
- [9]Section 13(1) of HPA requires the owner to serve a notice (Schedule 3) on the hirer before re-possessing the goods pursuant to a breach of the agreement by the hirer. It is a notice of intention to repossess which specifies the alleged default and quantifies the arrears. No specific consequence of failure to give that notice is contained in the section.
- [10]Section 13(3) of HPA requires an owner who has re-possessed the goods to serve a Schedule 4 notice on the hirer. That notice informs the hirer of his rights to recover the goods or to finalise the agreement. Subsection (4) then contains these provisions:
"(4) If the notice required by subsection (3) is not served, the rights of the owner under the hire-purchase agreement shall thereupon cease and determine, but, if the hirer exercises the hirer's rights under this Act to recover the goods so taken possession of, the agreement shall have the same force and effect in relation to the rights and liabilities of the owner and the hirer as it would have had if the notices had been duly given."
- [11]Section 46 of HPA provides that a contravention or failure to comply with any provision of HPA is an offence and specifies a monetary penalty. Offenders may be prosecuted summarily.
- [12]It is unnecessary to detail the relevant provisions of MVSA except to record that a security interest in a motor vehicle includes a hire purchase agreement under HPA (s. 5), which may be registered (ss. 6-7AA). Registration then acts as notice of the security interest to the world (s. 13(b)).
- [13]Rule 668 of the UCPR is as follows:-
"668 (1)This rule applies if -
- (a)facts arise after an order is made entitling the person against whom the order is made to be relieved from it; or
(b)facts are discovered after an order is made that, if discovered in time, would have entitled the person against whom the order is made to an order or decision in the person's favour or to a different order.
- (2)On application by the person mentioned in subrule (1), the court may stay enforcement of the order against the person or give other appropriate relief.
- (3)Without limiting subrule (2), the court may do one or more of the following -
- (a)direct the proceedings to be taken, and the questions or issues of fact to be tried or decided, and the inquiries to be made, as the court considers just;
- (b)set aside or vary the order;
- (c)make an order directing entry of satisfaction of the judgment to be made."
- [14]Both counsel before me accepted that "the court" referred to in rule 668(2) need not be the court as constituted when the order was made and I also accept that proposition. The rule does not say that it shall be the same judicial officer on each occasion and there are good reasons why that should not be required. First, the original judicial officer may not be available. That is the case here. His Honour Judge White is on long leave and will be for some months to come. Second, the enquiry made under the rule is not the enquiry made by the original judicial officer, it is a different enquiry based on new facts.
Effect of New Facts..
- [15]In considering this application I of course take the facts at their most favourable to Williams. Mr Philp of counsel for Toyota Finance invited me to do this and submitted that even on that basis Williams' application must fail.
- [16]The "new facts" are most conveniently set out in the affidavit of the second third party (Goldsborough), a director (with his father) of Deflectell which carried on a car rental business in Cairns and which at material times acquired cars under hire purchase agreements from Toyota Finance. A logistical problem was that Goldsborough lived in Cairns, his father in Brisbane and Toyota Finance's relevant officer (Milner) lived in Townsville. Accordingly Goldsborough and Milner agreed that Deflectell could execute blank hire purchase agreements and forward them to Milner. When Deflectell wanted to acquire a car Goldsborough would phone the details of the car to Milner who would insert them in a signed agreement.
- [17]That procedure was followed for a number of transactions, including this one. Goldsborough's affidavit swears that the document which Toyota Finance relies on is the hire purchase agreement in respect of the car which is the subject to these proceedings. The seal of Deflectell was affixed and was signed by his father and him, although their signatures were not witnessed at that time by Milner as the document purports. It is to be assumed therefore that Milner later signed his name as witness to the execution by Deflectell. Goldsborough then delivered the signed, blank document to Milner and Milner completed it with the appropriate details when he was advised of them by Goldsborough.
- [18]Goldsborough does not contest the accuracy of the details relating to the car contained in the handwritten additions to the agreement or suggest that Deflectel did not regard itself as bound by the terms of the agreement. Nor is any such suggestion made in relation to any similar transaction.
- [19]The arrangement which Goldsborough and Milner came to and which they proceeded to adopt was irregular and did not accord with best business practices. But, subject to the provisions of a statute such as HPA, this course of conduct was not illegal.
- [20]Section 3 (6) of HPA explicitly provides that a hire purchase agreement which is not in writing (as required by s. 3(2)(a)) gives no rights at all to the owner. But apart from the owner forfeiting the right to interest there are no specific consequences provided by s. 3(5) for a breach by the owner of s .3(1) or (1A), (which, in favour of Williams I assume occurred). Presumably Toyota Finance thereby committed an offence (s. 3(4)) which could be presented under s. 46 but neither s. 3(5) nor s. 46 provides that the commission of that offence vitiates all rights of the owner.
- [21]Similarly, the breach by the owner of the obligation imposed by s. 13(1) to serve a schedule 3 notice simply exposes the owner to s. 46. By contrast, the owner's breach of the duty imposed by s. 13(3) to serve a schedule 4 notice vitiates the owner's rights (s. 13(4)).
- [22]Thus the drafter of the Act has obviously carefully distinguished between breaches by an owner which vitiate the owner's title to the goods, and those which simply expose him to the risk of prosecution and the loss of interest charges. The facts which Williams learned after the order of His Honour Judge White, taken as established, at best would put Toyota Finance in the latter category. They do not cast doubt on Toyota Finance’s ownership of the car or the right of Toyota finance to possession of it.
- [23]Thus I do not consider that the new facts would entitle Williams to be relieved from the effect of the order of His Honour Judge White (r. 668(1)(a)). Nor do I consider that the new facts, if they had been placed before His Honour, would have entitled Williams to an order in their favour or to some different order (r. 668(1)(b)).
Conclusion
- [24]It follows that the application should be dismissed.