BMW Australia Finance Ltd v Property Management Corporation Pty Ltd

Medium Neutral Citation: BMW Australia Finance Ltd v Property Management Corporation Pty Ltd [2025] NSWSC 475

Hearing dates: 15 May 2025

Date of orders: 15 May 2025

Decision date: 15 May 2025

Jurisdiction: Common Law

Before: Davies J

Decision: (1) Judgment for the plaintiff against the second defendant and third defendant in the sum of $133,025.53.
(2) An order that the second defendant and third defendant pay the plaintiffs’ costs of the proceedings on the ordinary basis, as agreed or assessed.
(3) The plaintiff’s notices of motion filed 28 November 2024 and 7 April 2025 be otherwise dismissed.
(4) Direct that the plaintiff’s notice of motion filed 6 May 2025 be made returnable instanter before Davies J.
(5) Subject to order 6, grant leave to the plaintiff to use the documents that were:
(a) produced to the Court pursuant to the subpoena addressed to R&L Services Victoria Pty Ltd (ACN 657 005 493) as trustee for the Victorian R&L Services Trust (ABN 96 342 123 072) issued 31 March 2025; and
(b) uplifted by the plaintiff pursuant to the orders of Davies J made on 22 April 2025,
for the purpose of bringing a claim in the Courts of the State of Victoria against Ibby Social Services Pty Ltd (ACN 678 167 890) in relation to a motor vehicle better described as a 2018 BMW X5 Wagon motor vehicle (Engine No. 60875423, VIN No. WBACV620X0LB14603).
(6) Stay Order 5 of these orders until 5:00pm on 29 May 2024.
(7) Grant liberty until 5:00pm on 29 May 2024 to any respondent on the Release Motion to apply to vary or discharge Order 5 of these orders upon 2 days’ notice by email to the Associate to Davies J.
(8) Direct that the plaintiff serve each respondent to the Release Motion with a copy of these orders by express or registered post within 48 hours.
(9) Vacate the directions hearing (in respect of the Release Motion) listed on 29 May 2025.
(10) The plaintiff’s statement of claim filed 25 June 2024 be otherwise dismissed.

Catchwords: MORTGAGES AND SECURITIES – Personal Property Securities Act 2009 (Cth) – loan to first defendant guaranteed by second and third defendants - security interest over vehicle registered - where borrower disposed of vehicle to fourth defendant who subsequently disposed of vehicle in Victoria - default judgment against the second and third defendants – plaintiff to bring proceedings in Victoria for the recovery of the motor vehicle
CIVIL PROCEDURE – subpoenas – Harman undertaking – where plaintiff ascertained current owner of vehicle by subpoena to public authority – where plaintiff sought release from Harman undertaking to bring proceedings in Victoria against current owner of vehicle – release granted

Legislation Cited: Personal Property Securities Act 2009 (Cth) s 123, 206, 207
Road Safety Act 1986 (Vic)

Cases Cited: Bank of Queensland Limited v Star Trek Pty Ltd [2019] NSWSC 1712
Harman v Secretary of State for the Home Department [1983] 1 AC 280
Initial Services Ltd v Putterill [1968] 1 QB 396
United States Surgical Corp v Hospital Products International Pty Ltd (Unreported, NSWSC, McLelland J, 7 May 1982)

Texts Cited: Nil

Category: Procedural rulings

Parties: BMW Australia Finance Ltd (Plaintiff)
Property Management Corporation Pty Ltd (First Defendant)
Kadirhan Ilgun (Second Defendant)
Fatmagul Ilgun (Third Defendant)
MSS Project Management Pty Ltd (Fourth Defendant)

Representation: Counsel:
J Pokoney (Plaintiff)
No appearances (Defendants)
Solicitors:
Mills Oakley (Plaintiff)
Self-represented (Defendants)

File Number(s): 2024/233356

Publication restriction: Nil

Judgment

1. On 21 May 2019 the plaintiff entered into a Chattel Mortgage Agreement (“the Agreement”) with the first defendant. By the Agreement the plaintiff agreed to lend the sum of $153,491.40 to the first defendant. Security for the loan was a BMW X5 Geo 5 X drive 30D Wagon 5DR Steptronic with a Vin/chassis number WBACV620X0LB14603 (“the motor vehicle”). The second and third defendants were guarantors of the first defendant’s obligations under the agreement.

2. On 22 May 2019 the plaintiff registered its security interest in the Personal Property Securities Register under the Personal Property Securities Act 2009 (Cth) (“the PPSA Act”).

3. It was a term of the Agreement that the amount would be repaid by monthly instalments of $1,922.19 for 60 months with a final repayment of $38,160.00. The last payment received by the plaintiff was an amount of $4,544.00 on 22 June 2021.

4. It was an event of default under cl 17.1(a) of the Agreement that if the borrower did not pay on time any amount payable under the Agreement in the manner required within two business days after its due date.

5. On 5 July 2022 the plaintiff’s agent, Australian Collection Services (“ACS”), received a call from the second defendant who, from 27 August 2021 was the sole director of the borrower. The second defendant informed ACS that he had sold the vehicle to someone residing in Victoria. On 15 March 2023 the motor vehicle was registered under the Road Safety Act 1986 (Vic) to MSS Project Management Pty Ltd, the fourth defendant.

6. Clause 12(b) of the Agreement provides that the borrower must not transfer, dispose of or part with possession of the motor vehicle. Pursuant to cl 17.1(i)(i) it was an event of default if the borrower did not comply with any obligation not to transfer, dispose of or part with possession of the vehicle.

7. Demands were made on the first defendant on 10 August 2023 for immediate payment of $105,566.18 then outstanding under the Agreement. Demands were made on the second and third defendants on 28 May 2024 as appears in the affidavit of Mark David Wenn affirmed 7 April 2025. On 28 May 2024 demand was made on the fourth defendant for return of the motor vehicle.

8. When the demands were not answered, the plaintiff filed its statement of claim against the borrower, the two guarantors and the fourth defendant on 25 June 2024. No defendant has filed a notice of appearance or a defence in the matter.

9. On 28 November 2024 the plaintiff filed a notice of motion for default judgment for a liquidated claim. The matter was referred to me as the duty judge by the Registrar because part of the relief sought included,

A declaration that the plaintiff is entitled to possession of a motor vehicle better described as a 2018 BMW X5 Wagon motor vehicle (Engine No. 60875423, VIN No. WBACV620X0LB14603).

10. In the statement of claim the plaintiff otherwise sought relief by way of a liquidated sum of $122,726.51 against the first, second and third defendants, and an order that the fourth defendant cause the vehicle to be delivered to the plaintiff, alternatively, damages.

11. Since the proceedings commenced both the first and fourth defendants have been deregistered. In any event, the plaintiff has ascertained that the motor vehicle was disposed of by the fourth defendant on 15 April 2023. A subpoena was issued to R & L Services Victoria Pty Ltd seeking all documents to identify the current registered owner of the motor vehicle. The documents produced show that, not only was the vehicle transferred by the fourth defendant on 15 April 2023, but also that the purchaser, Mind and Mobility Support, thereafter transferred it to another company, Ibby Social Services Pty Ltd, on 10 June 2024.

12. The plaintiff today seeks default judgment against the second and third defendants, and seeks also to be released from its implied undertaking (from Harman v Secretary of State for the Home Department [1983] 1 AC 280) in relation to the subpoenaed documents to enable it to rely on them to bring proceedings in Victoria against Ibby Social Services Pty Ltd for the recovery of the motor vehicle.

13. There were difficulties serving the second defendant and the evidence tended to suggest he was avoiding service. Accordingly, I made orders on 22 April 2025 to enable service by means other than personal service. I am satisfied from the affidavit of Lynette Anne Harding sworn 12 May 2025 and the affidavit of Anthony Romeo of 8 May 2025 that service was effected in accordance with those orders.

14. I am satisfied from the affidavit of Anthony Romeo sworn 26 August 2024 that the third defendant was personally served.

15. Clause 17.2 of the Agreement provides:

If there is an event of default, we may do one or more of the following:

(a) Sue you for the total amount outstanding;

…

(c) Take possession of the motor vehicle or require you to deliver it to us;

…

(f) Enter any place we believe the motor vehicle is located in order to do anything described in this clause 17.2.

16. Clause 25.3 of the Agreement provides:

We may give you or the guarantor a certificate about an amount payable or other matter in connection with the Agreement. The certificate is sufficient evidence of the amount or matter, unless it is proved to be incorrect.

17. A certificate given by Dev Darvall, a Collections and Hardship Manager of the plaintiff, dated 27 November 2024 certifies that as at that date the outstanding debt under the Agreement was $98,683.86 with interest accruing at a daily rate of $27.14. He also certified that the total amount of recovery costs owing under the Agreement was $4,429.90 and the total amount of enforcement costs owing under the Agreement was $6,313.00.

18. Clause 3.1(c) of the Agreement provides that the borrower must pay any reasonable costs incurred in enforcing the Agreement or security after there is an event of default. Clause 5.1(b) provides that the borrower must pay enforcement costs incurred by the plaintiff or any attorney. Clause 5.2 provides that the borrower will indemnify the plaintiff and compensate the plaintiff for any liability or loss arising from, and any costs incurred in connection with, an event of default or from the borrower not complying with their obligations under the Agreement.

19. Clause 19.2 provides that the guarantors indemnify the plaintiff against any liability, loss or reasonable costs incurred by the plaintiff, and the guarantors agree to compensate the plaintiff for such loss and costs if the borrower does not pay the total amount outstanding in accordance with the Agreement.

20. The plaintiff is entitled to default judgment against the second and third defendants.

21. In relation to the application to use the subpoenaed documents in other proceedings, the Court may authorise documents compulsorily obtained in one proceedings to be used in other proceedings in a proper case: Initial Services Ltd v Putterill [1968] 1 QB 396. Such a case may be one like the present where the documents are sought to be used in subsequent proceedings: United States Surgical Corp v Hospital Products International Pty Ltd (Unreported, NSWSC, McLelland J, 7 May 1982).

22. In the present case, I take into account that the documents sought to be relied upon are public documents and no confidentiality is involved. Had the motor vehicle been transferred to a person or company within NSW, that entity would simply have been joined to the present proceedings as an additional defendant. It is necessary here for separate proceedings of the same type to be commenced in Victoria because of doubts about what this Court can authorise in relation to the actual seizure of the vehicle.

23. Section 123 of the PPSA Act provides that a secured party may seize collateral, by any method permitted by law, if the debtor is in default under the security agreement.

24. Chapter 6 of the PPSA Act deals with judicial proceedings. Section 206 defines a “PPS matter” as including a matter arising under the PPSA Act or otherwise arising in relation to a security agreement or a security interest. The present proceedings are a PPS matter as defined in the PPSA Act.

The Court’s general jurisdiction limits, including, but not limited to, limits as to locality and subject matter, to the extent that the Constitution permits.

26. Whilst that would not prevent this Court making an order that the plaintiff may seize the vehicle, it is doubtful that this Court has the power to provide a further order that the plaintiff be granted entry and access to any premises where the vehicle is held: Bank of Queensland Limited v Star Trek Pty Ltd [2019] NSWSC 1712 at [14]-[15], [18]-[19]. Cf. [21](3).

27. While it would have been appropriate to grant the declaration sought by the plaintiff in relation to the plaintiff’s entitlement to possession of the vehicle had it remained in the possession of the fourth defendant where no defence had been filed, it is not appropriate to do so where possession is to be sought against a fresh defendant. Such a declaration will be for the Victorian court to consider.

28. In relation to the use of the documents produced on subpoena, a return date was provided on the notice of motion of 29 May 2025. I have in fact heard the notice of motion today. Letters were forwarded to relevant parties, including R & L Services Victoria Pty Limited and Ibby Social Services Pty Limited, noting that the notice of motion was listed before the Common Law Registrar on 29 May 2025. A copy of the notice of motion seeking a release from the Harman undertaking was served with the letters.

29. Although it seems unlikely that any objection could be made to the use of the documents in subsequent proceedings by the recipient of the subpoena or the present owner of the motor vehicle where, as I have noted, the documents are public documents, a stay will be ordered in relation to the release of the Harman undertaking for a short period of time to enable those parties to make any application to the Court should they wish to do so.

30. Although a plaintiff is ordinarily entitled only to scale costs where default judgment is sought, and in the present case specific cost have been identified as recovery costs, the present matter was by no means a straightforward one. It required referral to a judge by reason of the relief sought. The subsequent difficulties in relation to the deregistration of the first and fourth defendants and the subsequent transfer of the motor vehicle required a number of hearings before me. The plaintiff is entitled to have its legal costs on the ordinary basis and not on any scale or restricted basis.

31. I make the following orders:

32. Judgment for the plaintiff against the second defendant and third defendant in the sum of $133,025.53.

33. An order that the second defendant and third defendant pay the plaintiffs’ costs of the proceedings on the ordinary basis, as agreed or assessed.

34. The plaintiff’s notices of motion filed 28 November 2024 and 7 April 2025 be otherwise dismissed.

35. Direct that the plaintiff’s notice of motion filed 6 May 2025 be made returnable instanter before Davies J.

(a) produced to the Court pursuant to the subpoena addressed to R&L Services Victoria Pty Ltd (ACN 657 005 493) as trustee for the Victorian R&L Services Trust (ABN 96 342 123 072) issued 31 March 2025; and (b) uplifted by the plaintiff pursuant to the orders of Davies J made on 22 April 2025,

for the purpose of bringing a claim in the Courts of the State of Victoria against Ibby Social Services Pty Ltd (ACN 678 167 890) in relation to a motor vehicle better described as a 2018 BMW X5 Wagon motor vehicle (Engine No. 60875423, VIN No. WBACV620X0LB14603).

6. Stay Order 5 of these orders until 5:00pm on 29 May 2024.
7. Grant liberty until 5:00pm on 29 May 2024 to any respondent on the Release Motion to apply to vary or discharge Order 5 of these orders upon 2 days’ notice by email to the Associate to Davies J.
8. Direct that the plaintiff serve each respondent to the Release Motion with a copy of these orders by express or registered post within 48 hours.
9. Vacate the directions hearing (in respect of the Release Motion) listed on 29 May 2025.
10. The plaintiff’s statement of claim filed 25 June 2024 be otherwise dismissed.

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