BMW Australia Finance Limited v Li [2025] FedCFamC2G 539

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).

1. The applicant, BMW Australia Finance Limited, which trades as BMW Financial Services, has brought an application pursuant to the National Credit Code in Sch 1 of the National Consumer Credit Protection Act 2009 (Cth) and the Personal Property Securities Act 2009 (Cth) (PPS Act) wanting possession of a motor vehicle the subject of security in connection with a finance arrangement purportedly entered into with the first respondent.
2. The relevant detailed background is set out in an affidavit of Mr Dev Darvall which is marked as Exhibit A2 in these proceedings, the details of which need not be presently recited. In summary, the applicant is a licensed finance provider, and in or around 31 October 2023, it entered into a chattel mortgage with the first respondent, or at least it purported to do so in relation to a motor vehicle, which is a BMW, registration number: DGL59V, engine number: 18186967, for the purposes of facilitating the purchase of the vehicle from Hornsby BMW which, at the time, was conducting a promotional sale. On the same day, the applicant registered a security interest in the vehicle in the Personal Property Securities Register, registration number: 202310310063631.
3. On 26 April 2024, the applicant served the first respondent with a default notice in relation to the finance contract. The first respondent did not comply with the notice within the time specified. The loan agreement, which was purportedly entered into by the first respondent and the applicant, allows the applicant to take possession of the vehicle in circumstances where there is a default and the applicant sought orders permitting it to lawfully exercise an entitlement under s 123(1) of the PPS Act to seize the vehicle by any method permitted by law.
4. The first respondent is an innocent party to a fraudulent transaction which was discovered shortly after an unknown party took possession of the motor vehicle. Although procured by fraud, the applicant sought to affirm the contract and the first respondent has agreed, or not objected to, the applicant affirming the contract. That agreement is set out in a document filed by the applicant on 13 March 2025, in which, subject to an undertaking that the applicant not seek any orders against the first respondent; the first respondent does not object to the applicant affirming the loan contract and the goods mortgage between him and the applicant made on 31 October 2023, or seeking to enforce the security over the vehicle against any third party in respect of the vehicle.
5. On 14 March 2025, I made some interim orders which permitted the applicant, or its agent, to enter premises in Ravenhall, where the vehicle the subject of the fraudulent contract had been located and stored. Since making those orders, the applicant has advised the Court that the subject motor vehicle has been recovered, and it now seeks to be discharged from its undertaking not to further deal with the vehicle until further order of the Court. Although the original application sought final orders in respect of possession of the vehicle, that has been achieved through effecting the interim orders I made on 14 March 2025.
6. In the circumstances, it is sufficient for me to note that the motor vehicle the subject of the finance contract has been recovered by the applicant, and on the basis of the material before the Court, I am satisfied the applicant is entitled to possession of the vehicle and has lawfully seized the vehicle pursuant to s 123 of the PPS Act.
7. Accordingly, it is appropriate the applicant be released from its undertaking noted in my 14 March 2025 orders and should be at liberty to deal with the vehicle pursuant to s 128 of the PPS Act and the Loan Contract and Goods Mortgage it made with the first respondent on 31 October 2023. The proceedings may otherwise be dismissed. There will be no order as to costs.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Gostencnik.