Phillips v Australian Finance and Leasing Limited [2009] VSCA 256

2 It is not disputed that her Honour's order was interlocutory and therefore a grant of leave to appeal pursuant to s 74(2D) of the County Court Act 1958 is required.

3 The applicant failed to apply for leave within the 14 day period prescribed by r 64.03(3) of the Supreme Court (General Civil Procedure) Rules 2005 which expired on 3 July 2009. His application was filed three days later, on 6 July 2009. Therefore, the applicant also requires an extension of time for leave to appeal pursuant to r 64.03(3).

4 The factors relevant to an extension of time for leave to appeal are not controversial. They include:

• the reasons for and extent of the delay;
• the existence of an arguable case or realistic prospects of success in the appeal (so that an extension is not futile), or, as sometimes alternatively expressed, whether doubt attends the decision below; and
• the prejudice likely to be suffered by the respondent if an extension is granted and whether such prejudice is irremediable.

5 The considerations relevant to an application to extend time overlap to some extent with those relevant to an application for leave to appeal. They, too, include a requirement that the decision below be attended by a sufficient degree of doubt; and that substantial injustice will result if the decision below is permitted to stand.

6 The issue before us was whether there was a sufficient prospect of the applicant persuading the Court of Appeal that the judge erred in holding that the Code did not apply to his loan agreement entered into on 24 July 2007 and to the two registered mortgages dated 18 October 2007 securing the loan.

7 Section 80 of the Code provides, inter alia, that a credit provider must serve a default notice allowing a 30 day period to remedy default before beginning enforcement proceedings in relation to a credit contract or a mortgage. It was not disputed that no notices under s 80 of the Code were served so that the application of the Code was of fundamental importance.

8 The relevant provisions of the Code are as follows:

6 Provision of credit to which this Code applies

(1) This Code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of precontractual obligations) is proposed to be entered into -

(a) the debtor is a natural person ordinarily resident in this jurisdiction or a strata corporation formed in this jurisdiction; and

(b) the credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes; and

(c) a charge is or may be made for providing the credit; and

(d) the credit provider provides the credit in the course of a business of providing credit or as part of or incidentally

...

(5) For the purposes of this section, the predominant purpose for which credit is provided is -

(a) the purpose for which more than half of the credit is intended to be used; or

(b) if the credit is intended to be used to obtain goods or services for use for different purposes, the purpose for which the goods or services are intended to be most used.

...

1. Presumptions relating to application of Code

(1) In any proceedings (whether brought under this Code or not) in which a party claims that a credit contract, mortgage or guarantee is one to which this Code applies, it is presumed to be such unless the contrary is established.

(2) Credit is presumed conclusively for the purposes of this Code not to be provided wholly or predominantly for personal, domestic or household purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes).

...

(4) A declaration under this section is to be substantially in the form (if any) required by the regulations and is ineffective for the purposes of this section if it is not.

9 In our opinion, the decision below is not attended by sufficient doubt to warrant either an extension of time within which to file an application for leave to appeal or a grant of such leave.

10 The applicant, in his proposed notice of appeal and related submissions, challenged the primary judge's holding that the Code was excluded on a number of bases.

11 He contended that her Honour erred in concluding that the business purpose declaration he completed was effective for the purposes of s 11(2)-(4) of the Code on the ground that the declaration did not satisfy the formal requirements of the Consumer Credit Regulations 1995 and because it was required to be made shortly before the grant of the loan. Her Honour held that it was substantially in the required form, rejecting the applicant's argument that suggested formal defects effectively negated the declaration's consumer warning. With respect we agree that the applicant's criticisms of the form of the declaration were without substance. Her Honour distinguished those cases in which such a declaration was held to be defective because of the interval of time between its execution and the making of the loan. She also rejected the applicant's allegation that the amount of and purpose of the loan had changed significantly between the date of the loan agreement and the declaration, and that the creditor knew or had reason to believe (despite the declaration), that the credit was in fact to be provided for the requisite purposes.

12 In our opinion, the applicant has not established that her Honour erred in principle or that her discretion miscarried. The findings made by her Honour in relation to the declaration were open to her. It is unnecessary to consider the construction of s 6 of the Code. The decision below is not attended by sufficient doubt to justify grant of leave to appeal and an extension of time is also unwarranted.

13 It follows that the applications should be refused.

[1] The Consumer Credit Code set out in the Appendix to the Consumer Credit (Queensland) Act 1994 applies as law in Victoria, see s 5 Consumer Credit (Victoria) Act 1995.