Fancourt v Mercantile Credits Ltd

The appellants, who are husband and wife and carry on the business of sapphire miners, entered into two separate hire-purchase agreements with the respondent, one for a loader described as an "International Hough JH90E 4WD Loader" and the other for a grader described as a "Galion 160L Grader". The agreement in each case comprised a printed form of offer which was completed and signed by the appellants as hirers and accepted by the respondent as owner. At the top of each printed form was a space for the name and signature of any dealer and, although nothing appears in these spaces on either form, the appellants acknowledged by their signature in each case that they had received from the dealer a duly completed written statement pursuant to s. 3(1) of the Hire-Purchase Act of 1959 Q.. Each form when completed gave the name of the appellants as hirers and above the words "Residential or Private Address" appeared the words "C/ - Post Office, Sapphire, Q.". Provision was made in each form for the amount of the deposit to be stated and the appellants acknowledged that they had "handed to the Dealer cash and/or goods at least equal in value to the deposit stated above with instructions to account to you [i.e., the respondent] in cash for the amount of that deposit". The necessary details were filled in upon each of the forms, which were dated 4 November 1978 and again signed by the appellants, thereby constituting them offers to the respondent. Those offers were accepted by the respondent on 21 November 1978.

The total amount payable under the agreement for the loader, including a cash deposit stated to be $24,600 in cash, was $165,285.60. Of this sum, $42,382.60 was shown as terms charges. The total amount payable under the agreement for the grader, including a deposit stated to be $5,000 in cash, was $19,146.20. Terms charges in the case of the grader were shown as $4,146.20.

It was a term of each agreement that if default were made in the payment of instalments payable during the hiring, the respondent could without notice, save as required by the Hire-Purchase Act, retake possession of the goods and that, upon such repossession, the hiring would terminate, subject to any rights conferred on the appellants by the Act to resume the hiring.

The appellants fell into arrears in the payment of instalments and the respondent repossessed the loader on 18 December 1979 and the grader on 1 February 1980.

On 20 July 1981, the respondent commenced an action in the Supreme Court of Queensland by a specially indorsed writ claiming $41,482.49 under the agreement for the loader and $1,557.99 under the agreement for the grader, together with interest on both amounts. The statement of claim alleged that the appellants had made default in the payment of rental instalments due under each of the agreements and that the respondent had duly repossessed and sold the loader and the grader. The sum of $41,482.49 which was said to be due in respect of the loader was after crediting the proceeds of sale and included terms charges of $40,908.05. The sum of $1,557.99 said to be due in respect of the grader was also after crediting the proceeds of sale and was the result of calculations which included $3,996.20 in terms charges. In each case interest was claimed pursuant to the agreement at 8 per cent per annum upon the amount due.

On 2 September 1981, the respondent took out a summons for summary judgment under O. 18, r. 1 of the Rules of the Supreme Court for $41,482.49 plus interest in respect of the loader and $1,557.99 plus interest in respect of the grader. The respondent's assistant manager, by an affidavit sworn on 31 August 1981, verified the matters set out in the statement of claim.

Before turning to the answering affidavits filed on behalf of the appellants, it is convenient to refer to certain provisions of the Hire-Purchase Act. Section 13 of that Act, so far as is relevant, is as follows:

(3) Within thirty days of the owner having taken possession of goods which were comprised in a hire-purchase agreement he shall serve on the hirer and every guarantor of the hirer a notice, in writing, in the form of the Fourth Schedule.

(4) If the notice required by subsection three of this section is not served, the rights of the owner under the hire-purchase agreement shall thereupon cease and determine

A notice in the form of the Fourth Schedule sets out advice to hirers of their right to reinstate the hire-purchase agreement and obtain redelivery of repossessed goods upon payment of arrears and the cost of repossession and the remedying of other specified breaches. Such a notice also advises hirers of their right to finalize the agreement by payment of the balance due and the costs of the repossession. Estimates by the owner of the amounts required to reinstate or finalize the agreement are set out in such a notice.

(1) Any notice or document required or authorised to be served on or given to an owner or hirer under this Act may be so served or given -

(b) By leaving it at his place of abode or business with some other person apparently an inmate thereof or employed thereat and apparently of or over the age of sixteen years; or

(c) By posting it addressed to him at his last known place of abode or business.

(2) The affidavit or oral evidence of an owner or his servant or agent as to the delivery or posting of any notice or document required to be served by this Act shall be admissible as prima facie evidence of the due service of the document or notice if the depondent swears to the facts necessary to prove due service either from his own knowledge or to his information and belief based on and verified by the records of the owner.

Section 25 of the Act, so far as is relevant, provides:

(1) An owner who enters into a hire-purchase agreement without having first obtained from the proposed hirer thereunder a deposit in cash or in goods, or partly in cash and partly in goods, to a value equal to at least one-tenth of the cash price of the goods comprised in the agreement shall be guilty of an offence under this Act:

(2) Without affecting the liability of any person to be convicted of an offence against this section, where the provisions of subsection one of this section have not been complied with, the liability of the hirer shall be reduced by the amount included in the hire-purchase agreement for terms charges

The provisions of this Part of this Act shall be deemed to have been complied with by the owner if a deposit in accordance with the provisions of this Part of this Act has been obtained by the dealer. "Dealer" is defined in s. 2, but as nothing turns on the definition it is unnecessary to go to it specifically.

On 17 September 1981, the male appellant swore an answering affidavit stating that in June 1978 he entered into an oral agreement with "I.S.A.S. Queensland" for the hire-purchase of the grader and the loader and pursuant to that agreement paid to "I.S.A.S. Queensland" the sum of $3,000 a month for three months. Later in the year, he said, he received the written hire-purchase agreements. He swore that he did not pay the sum of $24,600 or the sum of $5,000 or any other sum to the respondent by way of deposit. He also swore that he did not receive a notice in the form of the Fourth Schedule to the Hire-Purchase Act and that he had made inquiries of persons living at his abode and persons at his place of residence and that no such notice was left for him at either place. The appellant swore that he had a good defence to the respondent's claim. It should be added that the address given by the appellant in swearing his affidavit was care of "Post Office, Sapphire in the State of Queensland".

On 22 September 1981, an employee of the respondent swore in reply to the appellant's affidavit that he had caused Fourth Schedule notices to be posted to the appellants care of "Post Office, Sapphire, Queensland", in the case of the loader on 7 January 1980 and in the case of the grader on 18 February 1980. The deponent exhibited copies of these notices and swore that to the best of his knowledge and belief neither notice had been returned to the office of the respondent.

On 23 September 1981, the respondent's solicitor swore an affidavit to which he exhibited copies of the pleadings in an earlier action which the appellants had commenced against the respondent and Industrial Sales and Service (Queensland) Ltd. [presumably the same entity as "I.S.A.S. Queensland"]. We shall refer to this action later. This deponent also swore from information and belief that the address to which the Fourth Schedule notices were posted, namely, care of "Post Office, Sapphire, Queensland" was the address of the appellants last known to the respondent.

Finally, on 24 September 1981, an articled clerk employed by the appellants' solicitors swore that he was informed by the female plaintiff that the contents of her husband's affidavit were true and correct and that she had not paid any amount by way of deposit to the respondent nor had she any recollection of having received any notice in the form of the Fourth Schedule of the Hire-Purchase Act. She further said, according to the affidavit, that she had a good defence to the respondent's claim.

The summons was returnable before a master who, on 24 September 1981, ordered that judgment be entered for the respondent in the amount of the respondent's claim in respect of both the loader and the grader, together with an amount by way of interest at the rate of 8 per cent per annum from 21 December 1979 until the date of judgment. An appeal to the Full Court against this order was dismissed by a majority and it is against that dismissal that the appellants now appeal to this Court.

Before this Court argument was confined to two points. First, it was said that the appellants had shown that in relation to the whole of the respondent's claim there was a question in dispute which ought to be tried, namely, whether the appellants had been served with notices in the form of the Fourth Schedule to the Hire-Purchase Act. If they were not served, the rights under the hire-purchase agreements, which were the basis of the respondent's claim, would have ceased under s. 13(4) of the Act. Secondly, it was said that there was a question whether any deposit had been paid by the appellants. If no deposit was paid, the liability of the respondent was reduced under s. 25(1) of the Act by the amount of the terms charges.

Under O. 18, r. 1, the respondent was entitled to summary judgment unless the appellants satisfied the master with respect to the claim, or part of the claim, that there was a question in dispute which ought to be tried or that there ought for some reason to be a trial of that claim or part of it.

Turning to the question of the service of notices in the form of the Fourth Schedule, the submission put on behalf of the appellants was simply that the service attempted by the respondent was ineffective. The respondent, it was said, had relied upon s. 42(1)(c) of the Hire-Purchase Act and had purported to serve the notices by posting them to the appellants at their last known place of abode or business but had not done so because the address to which the notices were posted was not the address of a place of abode or business. It was, so the submission went, not the address of the appellants' place of abode or business because the Post Office at Sapphire was plainly neither their place of abode nor their place of business. It was not argued on behalf of the respondent that it was the address of the appellants' place of business because in the hire-purchase agreement they had given the Post Office as their residential or private address, but it was said that the notices addressed to the Post Office were addressed to the appellants at their last known place of abode.

The point is a narrow one. It is not whether it was established that the Post Office at Sapphire was the appellants' last known place of abode. It may be conceded that it was not. But the address which is referred to in s. 42(1)(c) is clearly intended to be a postal address and the postal address of a person's abode does not necessarily coincide with the physical location of that abode. It may be that postal services do not extend to a person's actual abode. Commonly in this country in rural areas the only mode of delivery of mail is to a roadside mail box or bag which is frequently designated by a number. The property or abode to which the mail is ultimately destined may be located some distance away from the mail box and not reached by postal services otherwise than by the use of the mail box. It could hardly be said in these circumstances that mail addressed to a person at an appropriate box was not addressed to him at his abode. In other circumstances, persons who do not have this facility or do not wish to avail themselves of postal deliveries, arrange for mail to be delivered to a post office, sometimes to a specific box and sometimes not. In these instances the only means of reaching those persons at their abode by the use of postal services may be through the post office and a letter addressed to a person at the appropriate post office may be said to be addressed to him at his abode because that is his appropriate postal address in the sense that a letter so addressed may be expected to reach him at his place of abode in the ordinary course of post. A letter addressed to "Blackacre" care of a post office or a post office box is none the less addressed to Blackacre if that is the postal address which Blackacre has, notwithstanding that the physical location of the property and of the post office are different.

In the present case the appellants gave their residential or private address as "C/ - Post Office, Sapphire, Q.". There is no distinction to be drawn between a person's residential or private address and the address of his abode, nor was any sought to be drawn. The address given by the appellants in the hire-purchase agreements was, therefore, the postal address of the appellants' abode last known to the respondent and, indeed, as would appear from the address given by the male appellant in the affidavit sworn by him in these proceedings, was in fact the postal address of the appellants' abode. The notices posted to the appellants were, in our view, addressed to them at their last known place of abode and were therefore served in accordance with s. 42(1)(c) of the Hire-Purchase Act.

The appellants swore that they did not receive the notices but it was not contended that this amounted to proof that they were not served with them. Such a contention would have been difficult having regard to the fact that there is nothing to show that the notices were not delivered as addressed and having regard to the fact that s. 42(1) clearly contemplates in pars. (b) and (c) service other than personal service.

Section 39(1) of the Acts Interpretation Acts 1954 to 1962 Q. provides:

(1) Where any Act authorises or requires any document to be given, sent, served, or delivered by post, then, unless the contrary intention appears, such giving, sending, serving, or delivery shall be deemed -

(a) To be effected by properly addressing, prepaying, and posting a letter or packet containing such document; and

(b) Unless the contrary is proved, to have been effected at the time when the letter or packet would be delivered in the ordinary course of post.

In the present case, the notices were not returned undelivered and there was no other circumstance which suggested that they did not reach their destination. Hence under s. 39(1)(b) service is deemed to have been effected at the time when the notices would have been delivered in the ordinary course of the post.

Section 39(1) of the Acts Interpretation Acts is subject to the expression of any contrary intention in the Act authorizing service of a document by post. There is, in our view, no contrary intention in the Hire-Purchase Act. It is true that s. 42(2) of the latter Act provides that affidavit or oral evidence, which may be based on information and belief, shall be admissible as prima facie evidence of due service. This sub-section is, however, concerned with the mode of proof of service by one or other of the methods of service made available by s. 42(1). In referring to "prima facie evidence" of due service, s. 42(2) is not intended to allow evidence of service by the means provided by s. 42(1)(b) and (c) to be rebutted by proof of non-receipt. Sub-section (2) is merely intended to allow evidence to be called to rebut evidence of the doing of those acts which are deemed by s. 42(1) to constitute service. Paragraphs (b) and (c) of s. 42(1) contemplate the possibility of something less than actual receipt by the person to be served. As was observed by Tindal C.J. in Bishop v. Helps [1] in relation to a comparable provision, although leaving notices at a place of abode or sending them through the post involve the possibility of non-receipt by the intended recipient:

It was probably considered that the public convenience would be promoted by the present provision, and that its advantages would greatly outweigh the inconvenience which, in some few cases, might possibly arise from it. Nevertheless, proof of the use of any one of the methods of service provided by s. 42(1) constitutes proof of service for the purpose of the Hire-Purchase Act: see McCallum v. Purvis [2] ; Senes & Sons Pty. Ltd. v. Carige [3] ; Alexander v. Stocks & Holdings (Sales) Pty. Ltd. [4] ; Cousins v. Gosford Shire Council [5] ; In re 88, Berkeley Road, N.W. 9 [6] . 1. (1845) 2 C.B. 45, at p. 57 [135 E.R. 857, at p. 862]. 2. [1906] V.L.R. 578, at p. 583. 3. (1967) 70 S.R. (N.S.W.) 95, at p. 102. 4. [1975] V.R. 843, at pp. 852-853, 855. 5. (1970) 92 W.N. (N.S.W.) 263, at p. 271. 6. [1971] Ch. 648, at pp. 654, 655.

There is a line of cases, commencing with Reg. v. County of London Quarter Sessions Appeals Committee; Ex parte Rossi [7] , which deal with the effect of proof of non-delivery where service by post is permitted and used, having regard to s. 26 of the Interpretation Act 1889 U.K.. That section is the equivalent of s. 39(1) of the Queensland Acts Interpretation Acts. The effect of the cases appears to be that proof of non-delivery means that service cannot be deemed to have taken place under the second limb of the section at the time of delivery in the ordinary course of the post and cannot be established as having taken place at any other time. The consequence is that where it is necessary to establish service at a particular time, proof of non-delivery is as effective as proof of non-service, notwithstanding that service by post is in the circumstances permitted and the requirements of the Interpretation Act are observed: see Beer v. Davies [8] ; Hewitt v. Leicester Corporation [9] ; Saga Ltd. v. Avalon Promotions [10] ; A./S. Cathrineholm v. Norequipment [11] ; cf. Lombard Australia Ltd. v. Mohrwinkel [12] . It may be thought that there is an anomaly in such a result because it means that, notwithstanding the adoption of a permitted means of service, the service is nevertheless ineffective if there is proof of non-delivery. It is, however, unnecessary to pursue these decisions here save to remark that they are all cases in which delivery was disproved. Despite remarks in the judgments about non-receipt, it was non-delivery which was significant because the second limb of s. 26 of the Interpretation Act refers to proof of the contrary of delivery. As the present case shows, delivery may be different from receipt by the intended recipient and, provided that delivery is not disproved, the fact of non-receipt does not displace the result that delivery is deemed to have been effected at the time at which it would have taken place in the ordinary course of the post. There is here no evidence of non-delivery. It follows that the application of s. 39(1) of the Acts Interpretation Acts in no way affects the proof of service of the notices in this case in accordance with s. 42(1)(c) of the Hire-Purchase Act and that such service is deemed to have taken place in the due course of the post. It also follows that the appellants fail to establish any defence under s. 13(4) of the Hire-Purchase Act.

1. [1956] 1 Q.B. 682. 2. [1958] 2 Q.B. 187. 3. [1969] 1 W.L.R. 855; [1969] 2 All E.R. 802. 4. [1972] 2 Q.B. 325n. 5. [1972] 2 Q.B. 314. 6. (1973) 21 F.L.R. 277; 1 A.C.T.R. 57.

Turning to the payment of the deposits, the respondent's material does not establish the payment of the deposits required by s. 25 of the Hire-Purchase Act save by verification upon affidavit of the statement of claim. Reference is made there to a deposit in the case of both the loader and the grader in the calculation of the amounts said to be due in respect of them. The appellants' material establishes that no deposit was paid by them to the respondent and the question is left open whether any deposit was paid to a dealer which might be deemed to be compliance with the Act under s. 26(2). The hire-purchase agreements, which are in the form of offers by the appellants, accepted by the respondent, each show a sufficient deposit and there are warranties the the deposits have been paid. The warranties do not of themselves, however, establish the payment of the deposits. Moreover, the hire-purchase agreements do not identify any dealer.

The appellants clearly raised the question of compliance with the Act in the payment of the required deposits, this being one of the two points relied upon by them in defence to the respondent's claim. The other point was the defence of non-service of the notices with which we have just dealt. In its affidavits in reply, the respondent dealt with the latter point but failed to make any attempt to establish the payment of the required deposits either to itself or to a dealer.

The respondent's solicitor swore an affidavit in which he exhibited the pleadings in an earlier action which the appellants had commenced against Industrial Sales and Service (Queensland) Ltd. and the respondent for damages for breach of contract in respect of the loader and the grader. The statement of claim alleges that, contrary to the provisions of s. 25 of the Hire-Purchase Act, no deposits were received by the respondent. The respondent in its defence denies that allegation and alleges that the appellants are estopped by the warranties from asserting that no deposits were received by the respondent. No allegation is made that deposits were obtained by Industrial Sales and Service (Queensland) Ltd. or any other dealer.

The question of the payment of the deposits to a dealer is, upon the material, left in the air. The appellants, of course, place on affidavit their belief that they have a good defence to the respondent's claim but the particularity of that defence in relation to the payment of any deposits is confined to a denial of any payment of deposits to the respondent. Under O. 18, r. 3, the appellants are obliged, if they are to show cause by affidavit why summary judgment should not be entered against them, to state the sources and grounds of their belief. They must, as was said by Lord Blackburn in Wallingford v. Mutual Society [13] , "condescend upon particulars" and the affidavits filed on behalf of the appellants do not go the whole distance in establishing a defence based upon failure of the respondent to obtain from the appellants the deposits required by s. 25(1) of the Hire-Purchase Act. Indeed, by what they do not say they raise at least a suspicion that the deposits may have been obtained by a dealer, thus satisfying the requirements of s. 25(1). If their own affidavits were all the material upon which the appellants were able to rely, there may have been a real question whether they should have been given leave to defend.

However, there was additional material before the master. The respondent filed affidavits in reply. No doubt it did so only by leave, but once leave was given and acted upon, the appellants were entitled to rely upon the additional material, as much for what it did not say as for what it did say. And notwithstanding the clear allegation by the appellants of a defence by reason of the failure of the respondent to obtain the necessary deposits, the respondent does not say by way of explanation that the deposits were obtained by the dealer. Moreover, in the pleadings in the other action, which were before the master, the failure of the respondent to comply with s. 25(1) was raised as an issue and the respondent did not plead by way of defence that the deposits were obtained by the dealer.

In these circumstances, the appellants ought, we think, to have been given leave to defend. The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: see Clarke v. Union Bank of Australia Ltd. [14] ; Jones v. Stone [15] ; Jacobs v. Booth's Distillery Co. [16] . In our view, it is not possible to say without doubt, on the whole of the material, that there is no question to be tried concerning the payment of the deposits by the appellants. The facts which are established are inconclusive, but the respondent, as well as the appellants, was in a position to establish conclusively the payment of the deposits if that fact could be established and, given the opportunity, it did not do so. That leaves, we think, a question to be tried and, although the appellants have not succeeded in positively establishing a defence, they should not in the circumstances be debarred from defending the action.

1. (1917) 23 C.L.R. 5. 2. [1894] A.C. 122. 3. (1901) 85 L.T. 262.

The question to be tried goes to part only of the claim, for the failure to comply with s. 25(1) of the Hire-Purchase Act results in the reduction of the liability of the hirer by the amount included in the hire-purchase agreement for terms charges. The appellants should, therefore, have leave to defend the action to the extent that terms charges are included in the amount for which judgment was given against them by the master, and otherwise that judgment should stand.