Australian Finance Direct v Director of Consumer Affairs Victoria

Judgment 1HIS HONOUR: Nature of proceedings The plaintiff, Perpetual Trustees Victoria Limited (PTVL), seeks possession of the land described in Certificate of Title Folio Identifier 1/194873 being 27 Charles Street, Liverpool NSW (the land) from the defendant, Ms Monas, who is the registered proprietor of the land and has mortgaged it to PTVL pursuant to registered mortgage AA705462 (the mortgage). 2PTVL's case is that it is entitled to possession of the land because Ms Monas breached the mortgage by failing to pay on time instalments required by the loan agreement, dated 12 May 2004 (the loan agreement), and failed to correct her default within the time specified in a default notice dated 29 January 2009 (the default notice). 3All of the matters raised by PTVL in its statement of claim are admitted except for the effect of the default notice. Accordingly, there remain to be decided the following issues: (a) Were these proceedings commenced in breach of s80 of the Consumer Credit (New South Wales) Code (the Code) . (b) If so, what is the consequence for PTVL's claim for possession, i.e. should the proceedings be dismissed due to PTVL's failure to comply with s80 of the Code. (c) Should the Court authorise the commencement of the proceedings in accordance with s80(4)(c) of the Code, as sought in the plaintiff's notice of motion filed 7 September 2010. (d) If any of these questions are decided adversely for Ms Monas, should PTVL be granted possession of the land. Factual Background 4Unless otherwise specified, I find the facts to be as follows. 5On 31 May 2004 PTVL advanced a total of $330,000 to Ms Monas pursuant to the loan agreement. The monies were advanced in two facilities, being $278,000 on a variable rate premium interest only account for 5 years, and $52,000 on a line of credit. Thereafter, Ms Monas made payments as required by the loan agreement. 6Default occurred when Ms Monas failed to pay the November and December 2008 repayments on each facility. On 29 January 2009 the solicitor for PTVL signed a default notice which was sent that same day by ordinary post to the address of the land. The default notice was able to be served in that manner because of clause 10.2 of the mortgage and s172(2) of the Code. 7The default notice was taken to have been delivered on the date it would have been delivered in the ordinary course of post, which is the fourth business day after posting, being 4 February 2009 (clause 10.5 of the mortgage, s173(1)(b) of the Code and s160 Evidence Act 1995). 8The form of the default notice is important. It read as follows: "Ms Bianka Monas 27 Charles Street LIVERPOOL NSW 2170 This is a Default Notice issued by Perpetual Trustees Victoria Limited ( Lender ) pursuant to section 57(2)(b) of the Real Property Act (NSW) 1900, by its solicitor, Kemp Strang, so authorised by the Lender to do so. If the Uniform Consumer Credit Code applies to your credit contracts and/or mortgage, this Default Notice is also a default notice within the meaning of section 80 of the Uniform Consumer Credit Code. Credit Contract status as at 27 JANUARY 2009 Credit Contract(s) Mortgage(s) Property Arrears Total Amount Outstanding MN330566001181012551 AA705462 27 Charles Street $4534.90 $284,332.04 increasing at a rate LIVERPOOL NSW of 8.41% pa MN330566001181019401 AA705462 27 Charles Street $ 892.85 $53,035.47 increasing at a rate LIVERPOOL NSW of 8.61% pa