Mandhan v Toyota Finance Australia Limited

Background 7 Mr Mandham commenced the underlying proceedings on 16 October 2018 as a self-represented litigant and has represented himself ever since. His articulation of his claims suffers from some shortcomings and, as the Judge noted, it is not always easy to discern precisely what it is that Mr Mandhan is alleging or claiming. 8 However, in the underlying proceedings, Mr Mandhan appears to allege that agents of Toyota Finance fraudulently manipulated documents so that his loan application of 27 May 2016 to purchase a vehicle from Peter Kittle Toyota was approved when it should have been refused. In particular, Mr Mandhan seems to contend that details of his personal circumstances and his expenses were either misrepresented or not taken into account in the loan application, and that he had been misinformed about the availability of finance protection insurance. Mr Mandhan claims relief by way of damages and, possibly, other pecuniary orders. 9 Mr Mandhan's allegations are denied by Toyota Finance. 10 On 8 May 2019, Toyota Finance filed a cross-claim seeking an order that Mr Mandhan pay the sum of $26,609.01 in addition to enforcement expenses and additional interest pursuant to the loan contract; an order under s 101 of the National Credit Code that Mr Mandhan deliver the vehicle identified in the loan contract to Toyota Finance; and an order that Toyota Finance or its agent be authorised to enter the residential premises of Mr Mandhan or any other location at which the vehicle is reasonably believed to be located for the purpose of taking possession of it, in the event that the vehicle is not delivered to Toyota Finance within 10 days. 11 In seeking these orders, Toyota Finance alleges that Mr Mandhan has been in default since 11 September 2018 in his obligations under the loan agreement into which he entered on 27 May 2016 (as varied in April 2018) by failing to pay the required monthly instalments. It alleges that Mr Mandhan had not remedied his default after being served with a Notice of Default in early April 2019. 12 Mr Mandhan contends that Toyota Finance is not entitled to bring this cross-claim because it had agreed to forebear from enforcing its loan contract. 13 On 11 July 2019, Mr Mandhan filed an interlocutory application seeking (relevantly) the following orders (expressed verbatim): 1. Applicant/Cross-Respondent is seeking summary dismissal in relation to the cross claim lodged by respondent/cross-claimant via its legal counsellor Thomsan Geer which the applicant/Cross-Respondent is standing to prove with evidence that the cross-claim is started for wrongful purpose and is an abuse of process on the basis; i. Toyota Motor Corporation, Toyota Finance and Peter Kittle Toyota with agreement is a party to direct and procure the commission of wrongful act by fraudulently misrepresenting applicant's provided information to deliberately cause damage to the applicant and made the applicant a financial debtor by deception by refraining itself from reasonably inquire and verify the important qualifying element of the fact, which was deliberately overridden, so as the credit applied can be approved. ii. Section 125 of the evidence act 1995, were evidence is adduced of the action of respondent and its legal counsellor in relation to furtherance of commission of fraud that renders a person to a civil penalty, then the client legal privilege stand lost. Section 57 of the evidence act 1995, were the determination of common purpose (whether to effect an unlawful conspiracy) by client and its lawyer may be used by the Honourable Federal Court in determining whether the common purpose existed. 2. … 2.1 Leave to addition names for cross examination at the time of trial From Thomsan Geer Michael O'Donnell and Viki Sanderson From TFAL anyone who has particular knowledge about the application and approval process of a credit application From TFAL or PKT or from Toyota Motor Corporation anyone who has particular knowledge to provide clarity about interlinked relationship between TFAL, Toyota Motor and Peter Kittle Toyota 3. Additionally requesting the Honourable federal Court to examine to confirm s35 of the crimes act 1914 false testimony by TFAL, PKT and Thomsan Geer to conspire to bring false accusation on the applicant by breaching s41 to defeat justice breach of s42 of Crimes Act-1914. Requesting the Honourable Federal Court to make the proposed summary disposal of cross claim by the respondent through its lawyer Thomsan Geer based on the finding and establishing of existence of fraud and conspiracy from the start of Credit Application submitted by the applicant to furtherance of commission of fraud by Thomsan Geer for its client via cross-claim. Once stands proven with relevant evidence beyond any reasonable doubt. (Emphasis in the original)

The decision of the primary Judge on the interlocutory application of 11 July 2019 14 Section 31A of the FCA Act empowers the Court to make an order for the summary dismissal of a claim if it is satisfied that there is no reasonable prospect of the claim being successful. 15 The Judge noted that, while Mr Mandhan sought the summary dismissal of the cross-claim, the submissions which he had presented in support of his interlocutory application sought, in effect, a determination of his claim. 16 The Judge summarised the two matters which Mr Mandhan had advanced in support of the summary dismissal of the cross-claim. The first was that Toyota Finance had agreed in September 2018 not to seek payment of the required monthly repayment instalments until he had obtained employment, with the consequence that it could not bring enforcement proceedings against him so long as that state of affairs continued. Mr Mandhan alleged that this agreement had been reached during a telephone conversation on 27 September 2018 between himself and an employee of Toyota Finance and was confirmed by a document he had received on 27 September 2018. 17 The Judge noted that, while the responsive submission of Toyota Finance assumed that the conversation alleged by Mr Mandhan had taken place, there was a dispute about its content, at [5]. In particular, his Honour noted the submission of Toyota Finance that, while it may have agreed to cease making direct debits on Mr Mandhan's account, it had not agreed not to enforce Mr Mandhan's obligation to make the payments. 18 The Judge was not satisfied that Toyota Finance had no reasonable prospect of establishing that it had not agreed to forebear from taking any enforcement action in respect of Mr Mandhan's default. His Honour said that the position was "not sufficiently clear" and that it was "a matter for trial", at [5]. 19 The second matter which Mr Mandhan advanced was that Toyota Finance had failed to undertake proper enquiries before approving the loan and that, if it had done so, it would not have made the loan to him. He referred in particular to Toyota Finance's use of the "Household Expenditure Measure" (HEM). Mr Mandhan characterised the conduct of Toyota Finance in this respect as involving misrepresentation and fraud. 20 With respect to this aspect of Mr Mandhan's submission, the Judge said, at [6]: … The matters which Mr Mandhan raises involve factual matters which are hotly contested. They are matters for trial and not for summary judgment. 21 With respect to [2.1] of the interlocutory application by which Mr Mandhan sought "Leave to addition names for cross examination at the time of trial", the Judge said: [11] … I will not allow Mr Mandhan to seek to join parties by side wind. If he applies to join other parties, then he should do so directly. It may be that joinder would be refused on the basis that there is no arguable case against the proposed respondent. Leaving these matters to one side, there is no basis upon which I could make the orders referred to in paragraph 2.1, both as a matter of law and as a matter of fact. 22 With respect to the claim in [3] of the interlocutory application, the Judge said: [13] Mr Mandhan did not say a great deal in support of this "order". He suggested that there was a fundamental inconsistency between his account and the account of the witnesses put forward by Toyota Finance. He contends that one of the parties is lying. If it is the witnesses to be called by Toyota Finance, then there should be, as Mr Mandhan put it, "repercussions". It is not appropriate to make any orders in terms of the "order" sought in paragraph 3. It is not for Mr Mandhan to bring proceedings under the Crimes Act 1914 (Cth). If there are any consequences of the type identified in paragraph 3 of the Interlocutory application, they will follow from whatever findings I make in this proceeding.

The application for leave to appeal against the judgment of 18 December 2019 23 Mr Mandhan's application seeking leave to appeal contains three grounds (quoted verbatim): 1. In relation to the Summary Dismissal of the Cross-Claim by the respondent along with enforcement action. Respondent did not provided any evidence differentiating exemption granted to applicant from making regular payment to enforcement action taken to recover the regular payment for the period applicant received the exemption. 2. In refusing to allow charges made under Crimes Act - 1914 against the respondent the Honourable Court in my belief abstained from considering the fact with evidence mentioned in the interlocutory application with affidavit. 3. Applicant request to reverse the cost of and incidental allowed to the respondent in relation to the interlocutory application due to the financial condition of the applicant and also due to the above grounds mentioned in the leave to appeal. 24 Mr Mandhan's draft notice of appeal accompanying the application contains three groups of grounds, the first two of which concern the Judge's dismissal of the summary judgment application. The third group (comprising eight grounds) concerns the Judge's refusal to make orders with respect to his allegations concerning ss 35 and 41 of the Crimes Act 1914 (Cth). Mr Mandhan's draft notice of appeal refers to additional provisions in the Crimes Act.

Principles and approach 25 The requirement for a party to obtain the leave of the Court in order to appeal against an interlocutory decision is based on the underlying principle that the time and resources of the Court and of the parties should not lightly be taken up with appeals about decisions in connection with the proceedings which do not finally determine the rights of the parties: Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572, (2000) 104 FCR 564 at [42]; Oswal v Burrup Fertilisers Pty Ltd (recs and mgrs. apptd) [2011] FCAFC 117 at [8]; and Barkla v Allianz Australia Insurance Ltd [2018] FCA 563 at [13]. Moreover, appellate courts exercise restraint before interfering with judgments concerning practice or procedure: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39, (1981) 148 CLR 170; Rahman v Commissioner of Taxation [2018] FCAFC 54 at [23]-[24]; and Minister for Immigration and Border Protection v SZVFW [2018] HCA 30 at [36]. 26 Accordingly, on an application of the present kind, the Court considers whether the decision sought to be impugned on appeal is attended with sufficient doubt to warrant its reconsideration by the Full Court and whether substantial injustice would result if such leave is refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; Seven Network Ltd v News Ltd [2005] FCAFC 125, (2005) 144 FCR 379 at [5]; and Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [20].

Consideration of the application for leave filed on 15 January 2020 27 The principal matter advanced by Mr Mandhan in support of his application for leave to appeal with respect to the Judge's refusal to order summary dismissal of the cross-claim of Toyota Finance was his assertion that Toyota Finance had not provided any, or sufficient, evidence of its contentions concerning the factual matters on which the Judge's decision rested. 28 Mr Mandhan's submissions made it evident that he wishes to agitate on an appeal factual issues bearing on the adequacy and appropriateness of the use by Toyota Finance of the HEM in its assessment of his loan application and bearing on the question of whether Toyota Finance had agreed to forbear from enforcing its entitlement. 29 Mr Mandhan also submitted that it would be burdensome for him to have to go to trial on the issues raised by the cross-claim, and that that had made it appropriate for the Judge to deal with the disputed issues in the course of the summary judgment application. 30 Section 31A of the FCA Act provides the framework in which an appeal would be considered, if leave is granted. As already noted, it provides (relevantly) that the Court may summarily dismiss a claim of a party if satisfied that the party has "no reasonable prospect of successfully prosecuting" it. 31 In my view, a grant of leave to appeal with respect to this aspect of the Judge's decision would not be appropriate. First, the factual issue which Mr Mandhan wishes to agitate is a matter for evidence, with the assessment of the evidence being properly carried out at the trial. That is when both Toyota Finance and Mr Mandhan can be expected to adduce that evidence. The Judge's conclusion that that was so was orthodox and is not attended by sufficient doubt to warrant consideration by the Full Court. 32 Further, and in any event, the trial in the underlying action is currently listed for hearing in a little over a month's time, on 14 April 2020, on a two day estimate. Mr Mandhan acknowledged that at the trial he will give evidence himself and adduce evidence in support of his wife in support of his own claim. That means that both will be giving evidence in any event. Mr Mandhan also acknowledged that the evidence he would lead at trial in relation to the cross-claim of Toyota Finance will also come from himself and his wife. This militates against the acceptance of Mr Mandhan's submission that it will be burdensome for him to have to deal with the cross-claim at trial. True it is that Mr Mandhan will have to deal with the evidence which Toyota Finance leads on the forbearance issue, but it not easy to see that that can appropriately be characterised as "burdensome". 33 The proximity of the trial, the nature of the evidence to be led by Mr Mandhan on both the claim and the cross-claim, together with the appropriateness of the issues between the parties being agitated in a trial and not on a summary judgment application, indicates that it cannot be said that Mr Mandhan will suffer substantial injustice if leave is refused. 34 Nor is appropriate to grant leave to appeal with respect to Mr Mandhan's proposed appeal against the refusal of the Judge to examine the question of whether Toyota Finance, Peter Kittle Toyota, Thomson Geer or other Toyota entities had contravened provisions in the Crimes Act or, as Mr Mandhan put it "to accept the charges brought under the Crimes Act 1914 with evidence". In the first place, Mr Mandhan had not sought to amend his pleading so as to bring such a claim. That by itself justified the Judge's refusal of Mr Mandhan's application. But more fundamentally, Mr Mandhan lacks the standing to bring proceedings under the Crimes Act, and the Court could not in any event deal with such claims in the context of civil proceedings. If proceedings are to be brought under the Crimes Act of the kind which Mr Mandhan claims to be appropriate, that will have to be by others (and not in the proceedings presently before the primary Judge). Although I consider that the Judge's decision on this issue is correct, it is sufficient to say that it has not been shown to be attended by sufficient doubt to warrant the attention of the Full Court and Mr Mandhan does not, in any event, suffer injustice if the decision is permitted to stand. 35 The third paragraph in the Application for Leave to Appeal seems to concern the Judge's order that Mr Mandhan pay the costs of Toyota Finance of and incidental to his interlocutory application. Mr Mandhan's draft notice of appeal does not contain any ground of appeal directed to this part of the application. In any event, Mr Mandhan has not shown an arguable basis upon which the Judge's exercise of the discretion with respect to costs can be said to be attended by doubt. It would not be appropriate for there to be a grant of leave to appeal with respect to this complaint. 36 It follows that the interlocutory application filed on 15 January 2020 must be dismissed.

Background to the interlocutory application of 30 July 2019 37 By his interlocutory application of 30 July 2019, Mr Mandhan sought the joinder of Toyota Motor Corporation (TMC), Toyota Motor Australia (TMA) and Toyota Financial Services Corporation (TFSC) as respondents to the proceeding "due to the following reason": • To direct and procure the commission from the fraudulent misrepresentation of true & correct information given by applicant. • To achieve causing damage to the applicant. • Intentionally induced and made and/or kept the applicant a financial debtor another form of slavery. 38 Mr Mandhan's supporting affidavit indicated that he relied upon a Wikipedia entry concerning TMC and to the other Toyota entities. It seems that he wishes to contend that the other Toyota entities were equally responsible with Toyota Finance for the wrongs he alleges.

The decision of the Judge of 7 January 2020 39 The Judge noted that the relevant rule for joinder is r 9.05 in the FCR. 40 Rule 9.05 provides: 9.05 Joinder of parties by Court order (1) A party may apply to the Court for an order that a person be joined as a party to the proceeding if the person: (a) ought to have been joined as a party to the proceeding; or (b) is a person: (i) whose cooperation might be required to enforce a judgment; or (ii) whose joinder is necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined; or (iii) who should be joined as a party in order to enable determination of a related dispute and, as a result, avoid multiplicity of proceedings. (2) A person must not be added as an applicant without the person's consent. (3) If a person is joined as a party under this rule, the start date of the proceeding for the person is the date on which the order is made. (4) An application under subrule (1) need not be served on any person who was not served with a copy of the originating application. Note The Court may make an order for any of the following: (a) service of the order and any other document in the proceeding; (b) amendment of a document in the proceeding; (c) the filing of a notice of address for service by a party. 41 The Judge noted that, in addition to the requirements for joinder set out in r 9.05, it was necessary for Mr Mandhan to show that he has "an arguable case against the proposed respondents, at least to the standard of being able to resist an application for summary judgment by the proposed respondent had he or she been sued in separate proceedings", citing Review Australia Pty Ltd v Redberry Enterprise Pty Ltd [2003] FCA 1009; (2003) 58 IPR 366 at [5] per Heerey J. 42 The Judge considered that the precise basis upon which Mr Mandhan sought the joinder of the three other Toyota entities had not been made clear. His Honour said that there was no suggestion in any of the evidence produced by Mr Mandhan that Toyota Finance had not, in its dealings with Mr Mandhan, been acting as principal. Furthermore, the Judge noted that while Mr Mandhan made allegations of fraudulent practices throughout the Toyota Group, he had not produced evidence of an arguable case that the allegations may be made out.

Consideration 43 The extension of time sought by Mr Mandhan (six days) is relatively short. Toyota Finance accepted that, if Mr Mandhan could establish that a grant of leave to appeal was appropriate, it would also be appropriate for the Court to grant an extension of time. 44 This means that the real question on the second interlocutory application of Mr Mandhan is whether the decision of the Judge is attended with sufficient doubt to warrant its reconsideration by the Full Court and whether Mr Mandhan would suffer substantial injustice if leave to appeal is refused, supposing the decision to be wrong. In my opinion, Mr Mandhan does not satisfy either of these limbs. 45 Like the Judge, I consider the exact nature of the claim or claims which Mr Mandhan wishes to pursue against the three additional Toyota entities to be unclear. Mr Mandhan points to the fact that Toyota Finance is part of the wider TFSC group and to a statement on the Toyota website that "[a]ll of the financial service operations are coordinated and managed by the wider Toyota Motor Corporation". However, the fact that TMC, or for that matter TFSC, has the overall coordination and management of the various subsidiaries would not, without more, indicate that Mr Mandhan has a cause of action against them. Additional elements would be required. Mr Mandhan appears to have recognised this because, in his affidavit in support of the application for leave to appeal, he asserts that TMC, TMA and TFSC owed him a common law duty of care which they had breached. This does not seem to be a claim which he had made before the Judge and, in any event, Mr Mandhan has not articulated a basis upon which such a duty of care may have been owed or breached. Nor did he adduce evidence indicating the existence of an arguable case of negligence against those entities. 46 At a practical level, even if the Judge's decision be incorrect, Mr Mandhan has not shown that any injustice would result from a refusal of a grant of leave to appeal. That is because Toyota Finance has accepted that Peter Kittle Toyota (with whom Mr Mandhan had his dealings) was, in the respects which are material, its agent, and because there is no reason to suppose that, in the event that Mr Mandhan makes good his claims, he would not be able to obtain, and enforce, the relief which he seeks against Toyota Finance. 47 In these circumstances, Mr Mandhan does not establish that a grant of leave would be appropriate.

General discretionary matters 48 There are additional discretionary reasons why a grant of leave to appeal would be inappropriate. If leave were granted, the question of whether the trial now listed before the Judge should be stayed would arise pending the hearing and determination of the appeal or appeals by the Full Court. If a stay was granted the result would be a postponement of the hearing and determination of the underlying issues between the parties. If leave is refused, the parties can have a trial, which is expected to be relatively short in the very near future and have all the issues between them resolved. That is a desirable outcome in the interests of the parties themselves and in the public interest. That is a further reason for the refusal of the grant of leave.

Conclusion 49 For the reasons given above, the applications of Mr Mandhan filed on 15 January 2020 and 3 February 2020 are dismissed. 50 In accordance with the submissions made by the parties at the hearing, Mr Mandhan is to pay the costs of Toyota Finance of and incidental to both his interlocutory applications, to be taxed in default of agreement. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.