Kwik Finance (Sydney) Pty Ltd v Walker

Judgment 1THE COURT: The applicants, Kwik and DTGN1, sought leave to appeal from the judgment and orders of the primary judge (Hall J) in Walker v Consumer, Trade and Tenancy Tribunal of New South Wales [2013] NSWSC 1432. Leave to appeal was required because the amount in issue in the underlying proceedings was $10,000: s 101(2)(r) of the Supreme Court Act 1970 (NSW). 2At the conclusion of the argument of that application on 17 March 2014, the Court made the following orders: (1) Application for leave to appeal dismissed. (2) Applicants to pay the respondent's costs. 3These are the Court's reasons for making those orders. 4At relevant times in 2005 the first applicant (Kwik) was a credit provider and the second applicant (DTGN1) a motor vehicle dealer. Each was a wholly owned subsidiary of PR Finance Group Ltd, a party to the proceedings before the primary judge but not a party to the proposed appeal. In July 2005 the respondent (Ms Walker) purchased a motor vehicle from DTGN1. That purchase was financed by moneys advanced by Kwik under a Loan Contract which did not provide for the payment of any interest and which described the "total interest charges" as nil. 5A dispute arose between the respondent and Kwik as to her obligations under the Loan Contract. The respondent commenced proceedings in the Consumer Trader and Tenancy Tribunal against Kwik and DTGN1 seeking relief under ss 70 and 71 of the Consumer Credit (New South Wales) Code 1995. For that Code to apply to a provision of credit and credit contract, s 6(1) required, among other things, that when the credit contract was entered into or proposed to be entered into "(c) a charge is or may be made for providing the credit". 6The respondent argued that the charge made to her for the provision of credit by Kwik was the difference between the price she paid for the relevant vehicle and its cash market value at the time of sale. That difference, being part of the purchase price, was paid to DTGN1. The applicants argued that such a charge was not one within s 6(1)(c) because it was not made by the credit provider, Kwik. For that reason it was said that the Code did not apply to the Loan Contract between Kwik and the respondent. 7That issue was determined separately by the Tribunal and decided in favour of the applicants: Walker v Kwik Finance (Sydney) Pty Ltd & Ors [2011] NSWCTTT 520. As a result the respondent's application to the Tribunal was dismissed. 8The respondent successfully challenged that decision in proceedings brought in the supervisory jurisdiction of this Court for relief under ss 65 and 69 of the Supreme Court Act. On 27 September 2013 orders were made quashing the decision of the Tribunal and requiring that the respondent's claim be heard and determined: Walker v Consumer, Trade and Tenancy Tribunal of New South Wales [2013] NSWSC 1432. 9On 16 December 2013 the proceedings before the Tribunal were settled on terms that the applicants pay the respondent compensation of $10,000 and her costs of the proceedings in the Tribunal. Those orders, made by consent, were agreed to be "subject to the outcome of an appeal, if any". 10The principles by reference to which a grant of leave to appeal should be made or withheld are summarised in the judgment of this Court (Ward and Leeming JJA) in Collier v Lancer (No 2) [2013] NSWCA 186: "7 While there are no exhaustive or rigid rules of practice or criteria governing the grant of leave to appeal (Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170), leave should be granted only where there are substantial reasons to allow an appellate review (Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564), such as where there is an error of principle which, if uncorrected, will result in substantial injustice (Minogue v Williams (2000) 60 ALD 366; BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VR 756; Niemann v Electronic Industries Ltd [1978] VR 431; Darrell Lea (Vic) Pty Ltd v Union Assurance Society of Australia Ltd [1969] VR 401). 8 Where there is no question of principle (and particularly where there is only a small amount in dispute), leave to appeal will usually be refused (Jaycar Pty Ltd v Lombardo [2011] NSWCA 284; Zelden Sewell Henamast Pty Ltd [2011] NSWCA 56; Dunn v Ross Lamb Motors [1978] 1 NSWLR 26). As Bathurst CJ said in The Age Company Ltd v Liu [2013] NSWCA 26 (at [13]), with the agreement of Beazley and McColl JJA, 'Generally speaking, it is only appropriate to grant leave in matters that involve issues of principle, questions of public importance or in circumstances where it is reasonably clear that an injustice has occurred by reason of error in the judgment, going beyond what is merely arguable'." 11The primary judge concluded that the Tribunal had jurisdiction to hear the respondent's claim. He construed the language of s 6(1)(c) as requiring that there be a relationship between the charge made or to be made and the provision of the credit which might be satisfied if the charge was made "by reason of" or "because of" or "in consequence of" the provision of the credit and irrespective of whether the charge was or would be made by the credit provider. He concluded that in the circumstances of the present case what was referred to as the Sale Price Differential, being the difference between the sale price and the cash market value of the motor vehicle, was a charge made by DTGN1 to the respondent for the provision of credit by its related company, Kwik. He also concluded that if the charge was required to be made under the credit contract, that condition was satisfied in this case because the credit "contract" consisted of a contracts or arrangements between the respondent, Kwik and DTGN1. As between the two related companies, those arrangements involved the payment of a fee of $1,000 from DTGN1 to Kwik, as a management fee, in respect of each vehicle purchased from DTGN1 which was financed by moneys advanced by Kwik. 12By its draft amended notice of appeal, and especially grounds 6, 7 and 8, the applicants challenge each of these conclusions. The first ground involves a question of statutory construction. The second and third challenge the primary judge's conclusions of fact. 13The arguments made in support of each of these grounds did not identify any reasonably clear error on the part of the primary judge. The language of s 6(1)(c) does not in terms say or require that the charge which is or may be made must be made by the credit provider. Nor would it be consistent with the purpose and object of that provision to read it down in that way so as to permit the operation of the Act to be avoided by an arrangement under which the credit charge was to be made by an entity other than the credit provider. The two factual questions which arise depended upon a close analysis of evidence concerning the value of the motor vehicle and the financial and other arrangements between the applicants and their parent company. The conclusion reached by the primary judge as to there being a difference between the sale price and market value of the vehicle that could constitute a charge for the provision of the credit accorded with the finding of the Tribunal, which ultimately rejected the respondent's argument on the basis that the charge was not made by Kwik as the credit provider. 14The question of construction as it arose in this case is not shown to be one of more general significance or importance. That is because the Code was subsequently amended and the amendment was carried into the National Credit Code (Cth). In May 2009, s 10C was included in the Code to make clear that a price differential, received by a seller of goods which is a related body corporate to the credit provider, would constitute a charge for providing the credit for the purpose of deciding whether there was a credit contract to which the Code applied. The Code as amended remained in force until July 2010 when it was replaced by the National Credit Code on the commencement of the National Consumer Credit Protection Act 2009 (Cth). Section 12 of the National Credit Code is in the same terms as s 10C of the Code. 15In the result, the question of construction which arose in the present case does not arise in relation to any similar transactions which occurred after May 2009. As to transactions occurring before that date, there was no evidence before the Court, or suggestion made in the written or oral submissions, of other disputes involving the applicants or any other financier which raise the same question as that which arose before the primary judge. 16That being the position, the circumstances did not justify a grant of leave. The proceedings did not raise a question of general significance and importance and the arguments on the application for leave did not reveal reasonably clear error in the construction of the relevant provision.