Roberts v. IAC (Finance) Pty Ltd

[1967] VR 231

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(Judgment by: Adam J)

Between: Roberts
And: IAC (Finance) Pty Ltd

Court:

Judge:
Adam J

Subject References:
Money lender
Non-compliance with statutory requirements
"Delivery" of note or memorandum of the contract
Note or memorandum to show the rate of interest charged
Extension of time for repayment of loan
Interest
Effect of extension agreement and requirements of the Act
Requirement to supply to borrower on demand particulars of loan, etc.
Failure to supply particulars
Materiality of omission
Instruments
Non-compliance with statutory requirements of registration
Bill of sale
Chattel mortgage
"Assurance of personal chattels"

Legislative References:
Money Lenders Act 1958 (No. 6324) - s 23; s 30
Money Lenders (Amendment) Act 1961 (No. 6819) - s 5
Instruments Act 1958 (No. 6279) - s 32; s 35

Hearing date: 5, 6, 7 October 1966
Judgment date: 31 October 1966

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Judgment by:
Adam J

In this action the plaintiff, Miss Roberts, claims that the defendant, IAC (Finance) Pty. Ltd. has wrongfully seized and detained her motor car, and for remedy has sought certain declarations, an injunction and damages. The defendant is a registered money lender. In April 1965 it financed by way of loan the purchase by the plaintiff of a motor car from Kellow Falkiner Pty. Ltd. The plaintiff made defaults in repayment of certain instalments of the loan, and relying upon the provision of a chattel mortgage given as security, the defendant seized the car and has since retained it. For its part the defendant claims that, because of the plaintiff's defaults in payment of instalments of the loan, it became entitled to repayment of the principal moneys in full with interest, and for the recovery thereof has counter-claimed in this action.

At the time of the seizure of the car in August 1966, the plaintiff was in possession as owner. Prima facie, therefore, the actions of the defendant in seizing and detaining the car were wrongful. The substantial issue on the plaintiff's claim is whether the chattel mortgage given as security for the loan provided the necessary justification for the defendant's actions.

Before me the plaintiff, by her counsel Mr. Dwyer, contended that the chattel mortgage which purported to give the power of seizure for default in repayment of the loan could not be availed of by the defendant, because it was rendered unenforceable both under the provision of the Money Lenders Act, and PtVI of the Instruments Act, which relates to bills of sale.

Before examining these contentions, it is necessary that I recount certain facts relating to the transaction between the parties, as to which there would appear from the evidence to be no serious doubt.

Early in the year 1965 the plaintiff was minded to trade in her old motor car for a new one. On 1 April 1965, at the premises of Kellow Falkiner Pty. Ltd. (hereafter called Kellows), she signed a document described as a sale order, by which she ordered from that company, subject to conditions therein set out, a car under the general description of a new Morris 1100 saloon car with safety belts, for the price of 992 pounds. Included among these conditions were the following: CL3: "No property or rights in the vehicle shall pass to me until the purchase price of the vehicle has been paid in full by me, or on my behalf." And CL6: "This order is conditional upon IAC Finance Pty. Ltd., agreeing to lend me a sum of at least the amount shown as the balance of the price of the vehicle. You may accept this order any time after the same becomes unconditional by delivering the vehicle to me or by receiving payment in full for the vehicle."

A trade-in allowance on the old car of 456 pounds 4s 11d. had been agreed, thus the balance of the purchase price was shown as 535 pounds 15s 1d.

On this same occasion on 1 April the plaintiff signed a second document, being a credit request to the defendant in the defendant's printed form. This had been then and there completed by an employee of Kellows. It took the form of a request to the defendant for a loan to enable the plaintiff to purchase and pay for the car she had ordered, and requested the defendant "to undertake responsibility to Kellows for the balance of the price" for the motor car, and to pay on her behalf registration fees and insurances. The total amount of the loan requested was 609 pounds 18s.

By CL3 of this credit request the plaintiff agreed to pay interest on the principal amount of such loan outstanding from time to time, at the rate of 12.83 per cent per annum, and to pay the principal money and interest at such rate by 36 consecutive monthly instalments of 20 pounds 10s. commencing at the time specified, the instalments to be applied first in reduction of interest and then of principal. As a further term the plaintiff, by CL4 thereof, agreed that in the event of default in payment on the due date of any instalment the whole of the balance of principal remaining unpaid, together with the due proportion of interest calculated up to the date of demand for payment, should become due and payable, and also that on default in payment on the due date of any instalment the amount in respect of which default was made should until payment bear simple interest at the rate of 12.83 per cent.

By CL6 the plaintiff agreed that the defendant might accept the credit request by notifying Kellows by telephone or otherwise that it accepted this offer, or to the effect that it undertook responsibility for the balance of the price, or by paying the balance of the price to Kellows.

On the reverse side of this document was a printed form of what was there described as a "chattel mortgage". This also was signed by the defendant on the same occasion on 1 April. This printed form began:

"Between the customer described overleaf of the one part and IAC (Finance) Pty. Ltd. of the other part, whereby in consideration of the personal loan to be made by you to me as provided overleaf, I the said customer agree with you the said IAC (Finance) Pty. Ltd., as follows:--".

CL1 then provided:

"In consideration of your acceptance of my request as provided in CL6 overleaf, I will as beneficial owner assign to you all goods which I purchase with the principal of the loan as security for repayment of principal and interest as provided overleaf, and I agree that legal title to such goods shall vest in you at or after my acquiring legal title thereto upon the happening of any one of the following events, namely, my taking possession of the goods as purchaser; my giving or delivering to you a card headed acknowledgment card'...or my acknowledging your mortgage by any conduct on my part."

CL2 provided, inter alia:

"I warrant that at the time of execution hereof I have acquired no property whatsoever in the goods and that I have agreed with the supplier that I will not obtain any title to the goods until payment of the balance of the purchase price."

By CL4 the plaintiff agreed to pay any expenses incurred in exercise of the defendant's rights consequent upon default.

CL6 provided, inter alia:

"That upon the happening of any of the events referred to in CL5" (and these events include any default in payment of principal or interest payable in respect of the requested loan) "you may

(a)

seize and take possession of the goods or any part thereof without prior notice to me;

(b)

sell or dispose of the goods."

At the time of the plaintiff signing the foregoing documents--the sale order, the credit request and the chattel mortgage--no identifiable motor car had been appropriated to the proposed transaction. This credit request, together with the proposed security therefor, were promptly forwarded by Kellows to the defendant. On 2 April, in anticipation no doubt of the acceptance of the credit request and payment for the car, a new Morris car 1100 saloon was registered in the name of the plaintiff and delivered to her. On 8 April the defendant, having decided to accept the credit request and proposed security, posted to Kellows a cheque of sufficient amount to pay for the car in full. On the following day, the defendant posted certain documents by certified mail to the plaintiff. There was a dispute between the parties as to what precise documents were so posted and received by the plaintiff, but it was common ground that at least such documents included a copy of the credit request, with the chattel mortgage on the reverse side: and also what was called a remittance coupon book.

Pursuant to the loan agreement arising from acceptance of the credit request, the first instalment of repayment of the loan amounting to 20 pounds 10s. became due payable on 8 May 1965, and further instalments on the eighth day of each succeeding month.

The plaintiff fell into arrears with her instalments. On or about 22 November 1965, when the plaintiff was in default in payment of the October and November instalments, the defendant was pressing her for payment. In accordance with the terms of the loan and the chattel mortgage the defendant was at this time entitled to have demanded repayment of the whole of the principal remaining unpaid, together with a due proportion of the interest, including interest at the prescribed rate on the two overdue instalments, and also to have enforced its security. However, it was then orally agreed between the parties that in consideration of the sum of 13 pounds then and there paid by the plaintiff to the defendant the defendant would extend the period for repayment of the loan by two months.

As I interpret this agreement, the defendant thereby agreed in consideration of this cash payment that the time for payment of the two instalments then payable should be postponed until the period of two months after the final instalment should, according to the terms of the loan, have been paid, and thereby agreed to waive all rights accruing to it by reason of such defaults in payment.

The subsequent history of the loan transaction was marked by repeated late payments of instalments, until 27 April 1966, after which the plaintiff, despite many assurances that the same would be forthcoming, failed to make any further payments. On or about 18 August 1966 the defendant siezed the motor car, and on the following day served upon the plaintiff a notice demanding repayment of the whole of the balance of the principal moneys remaining unpaid, together with a due proportion of interest.

The writ in this action was issued on 23 August 1966, and the counterclaim delivered on 8 September. The plaintiff's first contention was that the chattel mortgage document, upon which the defendant relied for its power to seize the motor car, was rendered unenforceable by certain provisions of the Money Lenders Act 1958 (as amended by Act No. 6819). S23 of that Act, as amended, provides:--

"(1)

No interest under any contract for the repayment of money lent by a money lender shall be recoverable and no security given to any money lender in respect of any such contract or loan shall be enforceable unless--

(a)

a note or memorandum in writing of the contract is made and signed personally by the borrower;

(b)

a copy thereof is delivered to or sent by prepaid registered letter through the post addressed to the borrower within seven days of the making of the contract; and

(c)

together with such copy there is delivered or sent to the borrower as aforesaid a summary in writing in the prescribed form of the provisions of this Part which afford protection to borrowers-- and no interest under any such contract shall be recoverable and no such security shall be enforceable if it is proved that the note or memorandum aforesaid was not signed by the borrower before the money was lent or before the security was given (as the case may be).

"(2)

The note or memorandum aforesaid shall contain all the terms of the contract, and in particular shall show--

(a)

the date of the making of the loan;

(b)

the amount of the principal of the loan; and

(c)

either--

(i)

the interest charged on the loan expressed in terms of a rate per centum per annum, or

(ii)

the rate per centum per annum represented by the interest charge as calculated in accordance with the provisions of the Second Schedule."

I agree with the contention of Mr. Dwyer that if this security for the loan was "unenforceable" because of non-compliance with s23, the prohibition on enforcement under that section would extend to the exercise of all extrajudicial remedies authorized or allowed by the security: see Hastings Deering Finance and Investment Co Ltd v Reed (1962) 106 CLR 529; [1962] ALR 586. Thus, the critical question is whether the defendant failed to comply with the requirements of this section.

It was not disputed that s23 applied to the contract of loan and the chattel mortgage given as security in respect thereof. Nor was it disputed that the requirements of subs(1)(a) had been duly complied with. The questions at issue were whether paragraphs (b) and (c) of subs(1), and paragraph (c) of subs(2) had been complied with.

As to subs(1)(b), the plaintiff conceded that she had in fact received by certified mail from the defendant a copy of the note or memorandum of the loan contract, as signed by her, and I am prepared, although this was not expressly admitted, to find that she received it within seven days of the making of the contract. S25(2) of the Acts Interpretation Act makes it clear that for present purposes a letter sent through the certified mail service, if properly addressed, complies with the statutory requirement to send it to her by registered mail. Mr. Dwyer contended, however, that I should not find on the evidence that the letter enclosing the copy memorandum had been properly addressed to the plaintiff. If I did not, he submitted, there would be a fatal non-compliance with the strict requirements of this paragraph. The word "delivered" in the paragraph, he said, meant delivered personally, as distinct from a sending by post, and a sending by post meant by letter properly addressed. Whether this distinction be right or not, and I very much doubt its correctness (see City of Camberwell v Reid, [1954] VLR 653, at p. 658; [1955] ALR 204) the question has become academic because my finding on the probabilities is that the letter containing this copy memorandum was in fact properly addressed to the plaintiff. At the material time the plaintiff's address was "Flat 1, The Parade, Ascot Vale". An exhibit in evidence was "the posting receipt for certified mail". This recorded certified mail sent by the defendant (along with mail to many other persons) on 9 April 1965, which was the relevant date. This record, which after being prepared in the defendant's office was receipted by the Post Office, records that on this date certified mail was posted to the plaintiff, but to an address "Flat 1, The Esplanade, Ascot Vale". However, from the evidence given by the defendant's clerk who typed the posting receipt, and from the evidence of the usual practices followed in the defendant's office, coupled with the admitted fact that the letter was received by the plaintiff, I consider it proper to conclude that the letter was in fact addressed to the plaintiff at her proper address as shown in the enclosures to the envelope, that is, Flat 1, The Parade, Ascot Vale, and that the posting receipt as typed contained a typographical error which had escaped the notice of the clerk responsible for it, and the postal official who stamped it.

Subs(1)(c) requires that there be sent to the borrower, together with the copy memorandum, a summary in writing of the several provisions of the Act which afford protection to borrowers. The defendant asserted, but the plaintiff denied, that this requirement was complied with. Whether it was or not depends on what documents, if any, other than the copy memorandum and the remittance receipt book, which were admittedly received by the plaintiff, were included in the envelope posted to her on 9 April. If the usual practice of the defendant as deposed to in evidence was followed on this occasion, there was posted together with the copy memorandum of contract a printed form of "letter confirming acceptance" with an appropriate summary of rights printed on the reverse side thereof, and also an acknowledgement card attached thereto, which by the letter confirming acceptance the plaintiff was requested to return in a business reply envelope, also enclosed. Not surprisingly, no witness called by the defendant was able to swear positively of his or her own knowledge that such documents had in fact been included in the envelope posted to the plaintiff, but a Miss Painter, one of the defendant's staff, expressed herself satisfied that these documents had been sent together with the copy memorandum, because she had on 9 April 1965 in the appropriate register of the defendant signed a certificate to this effect. According to her own and the usual practice, she would not have signed such a certificate unless she had personally satisfied herself of the truth of the facts to which she certified. Furthermore, as she swore, the facts so certified to invariably were checked by a second member of the staff. There was independent evidence that the "acknowledgement card", which would have been attached to the letter confirming acceptance with the summary of rights overleaf, was in fact received by the plaintiff. That evidence showed that such acknowledgement cards when returned by borrowers were stamped in the appropriate department of the defendant's office, with the date and precise time of their receipt. The relevant acknowledgement card was produced from the possession of the defendant bearing the usual stamp indicating its receipt by the defendant on 10 May 1965.

In face of this evidence I am not disposed to accept the evidence given by the plaintiff, in this respect not very confidently I thought, that she received from the defendant neither the letter confirming acceptance with the summary of rights overleaf, nor the acknowledgement card normally attached thereto. I should perhaps add that on a number of matters including this, I have felt that the plaintiff was not a witness in whose evidence I could feel complete confidence.

A further attack on the chattel mortgage security was based on the alleged failure in the note or memorandum of the loan contract to show the interest charged on the loan expressed in terms of a rate per cent per annum: see s23(2)(c)(i). I have found some difficulty in appreciating any force in this contention. It was a term of the loan contract, as expressed in the credit request (which was the note or memorandum of the loan), that the borrower should pay interest on the principal amount of the loan outstanding from time to time at the rate stated in such document. That rate was therein expressed to be 12.83 per cent per annum. It was not, I understood, disputed that the provision that the principal money and interest was to be paid by 36 monthly instalments of 20 pounds 10s., the instalments being applied first in reduction of interest and then of principal, did as a matter of calculation involve the payment of interest at 12.83 per cent per annum as stated, nor indeed that the calculation of the total interest payable on due compliance with the loan contract shown in the memorandum as 128 pounds 2s. was other than correct. Why then has there been any failure to show the interest charged on the loan, expressed in terms of a rate per cent per annum? The true interest has been shown.

Mr. Dwyer's contention was that s23(2)(c)(i) required interest at a so-called flat rate to be shown--in other words, the total interest to be charged on the loan over the whole period of the loan expressed in terms of an annual rate without regard to any repayments of the loan by instalments stipulated for during such period. In that case, so he said, the interest charged would have been shown at the rate of seven per cent per annum, not 12.83 per cent. Apart from a statement in Pannam, The Law of Money Lenders, p. 258, which would seem to support this, I can see no justification for it. Such authorities as Parkfield Trust Ltd v Curtis, [1934] 1 KB 685; [1934] All ER Rep 43, and Mason and Wood Ltd v Greene, [1936] 2 KB 370; [1936] 2 All ER 509, indicate that s23(2)(c)(i) requires the effective or true interest rate to be shown, and this is what one might have expected, as the interest charged if expressed in the circumstances of this case at a flat rate as suggested by Mr. Dwyer, would be misleading and quite uninformative to the borrower.

In the result, then, I find that in relation to the contract of loan and the security given in respect thereof there was no such contravention of s23 of the Money Lenders Act as would render the security unenforceable.

Mr. Dwyer next contended that the agreement of 22 November 1965, by which in consideration of the cash payment of 13 pounds the period for repayment of the loan was extended by two months, operated to render unenforceable the chattel mortgage security because the requirements of s23 of the Money Lenders Act had not been complied with in relation to such extension agreement. It was common ground that the defendant did not even purport to comply with s23 in relation to such extension agreement, but the dispute has been as to the consequences of that.

As already indicated, I consider that the meaning and scope of this agreement was that the defendant thereby bound itself to give up such rights as had accrued to it by reason of the plaintiff's defaults in paying the two instalments of 20 pounds 10s. each, due in October and November 1965, and accepted in lieu thereof the plaintiff's undertaking to pay such overdue instalments in the extended period of two months after the agreed period of the loan. The true meaning of this agreement is, I consider, that in other respects the original contract of loan and the security given therefor were to stand unaffected. The original obligation continued, although the content was to this limited extent modified. It may be conceded that this agreement was in itself a contract for the repayment of money lent, within the meaning of s23, as "loan" is by s3 defined to include "the forbearance to require payment of money owing on any account whatsoever"; and, accordingly, that for the recovery of interest on the money so lent and for the enforcement of any security in respect of such loan compliance with the conditions prescribed by s23 was essential. But, in my opinion, this could, at most, preclude the defendant recovering any interest in respect of what is deemed to have been money lent under such extension agreement, or enforcing any security given in respect of such loan. The subject of this loan would not, I consider, extend beyond the two instalments in question. In my opinion, non-compliance with s23 in relation to the agreement of 22 November has no effect on the defendant's rights to recover the principal moneys originally lent with interest at the rates stipulated in the original agreement, and does not render unenforceable the security given in respect thereof.

As no rights are asserted by the defendant in the present action in reliance upon the extension agreement or any security given to secure performance of such agreement, I consider that any failure by the defendant to comply with s23 in relation to the extension agreement of 22 November has no relevance to the present proceedings.

Agreements for extensions of loans or variations in the terms of loan contract may, no doubt, involve in effect the discharge of a pre-existing loan, and the making of a fresh loan in respect of moneys then outstanding on different terms. In such cases, non-compliance with the conditions prescribed by s23 in regard to such substituted loans of this nature may, no doubt, affect a money lender's rights of recovery in respect of any loan contract, and any security given in respect thereof: see. for example, Eldridge and Morris v Taylor, [1931] 2 KB 416; [1931] All ER Rep 542; BS Lyle Ltd v Chappell, [1932] 1 KB 691; [1931] All ER Rep 446. But as already indicated in regard to the extension agreement of 22 November I regard it as a mere variation of the rights and obligations under the original loan contract which left such contract and the security given in respect thereof unaffected save to the limited extent that the defendant thereby agreed to forbear to exercise for a period its rights arising from the defaults in payment of the two instalments on the due date.

As a further and quite independent ground of attack on the chattel mortgage security, the plaintiff relied upon the provisions of PtVI of the Instruments Act. Mr. Dwyer contended that this document was a bill of sale, which for non-registration was avoided by s35 of the Instruments Act. It was a bill of sale, he contended, within the definition of "bill of sale" in s32, because it was an assurance of personal property; and was registrable under s35 as being a bill of sale whereby the grantee had power to seize or take possession of the property subject thereto.

It was common ground that the chattel mortgage had not been registered as a bill of sale; but Mr. Aickin, on the defendant's behalf, submitted that the document was not a bill of sale. It was, of course, not to the defendant's interest to deny, and it did not deny, that the transaction between the plaintiff and the defendant considered in its entirety operated as an assurance of the motor car to the defendant by way of security for the loan, giving to the defendant a power of seizure for default in repayment of the loan, but it relied on the well-settled proposition that the bills of sale legislation does not strike at transactions as such, but only at documents which amount to bills of sale. Thus the question, and only question, was whether the chattel mortgage as a document amounted to an assurance of personal chattels within the meaning of the statutory definition. It was not suggested that any other portions of the statutory definition of bill of sale were relevant to the present case.

Clearly the chattel mortgage document did not amount to an assurance of any personal chattels when it was signed on 1 April 1965. It then amounted to no more than a conditional offer by the plaintiff to make an assignment of personal chattels to the defendant, if and when the defendant accepted the request for a loan. In that event, the plaintiff bound herself to assign to the defendant, as security for the loan, all goods which she purchased with the loan moneys so requested. When this offer was made, the goods intended to be subject to the mortgage had not even been ascertained. This chattel mortgage document did not create legal relations between the parties until the defendant subsequently accepted the request for the loan, an acceptance which incidentally amounted to its acceptance of the offer of the chattel mortgage.

I agree with Mr. Dwyer's submission that the question, whether the chattel mortgage document amounted to a bill of sale or not, is to be determined as at the time when it took effect as an agreement binding the plaintiff, and not as at the date when as a mere offer it was signed by the plaintiff. Despite, I confess, some encouragement from me, I did not understand Mr. Aickin seriously to contest this.

While relying on the proposition in Coppel, Bills of Sale, p. 15, that "No document is an assurance of personal chattels which does not upon its execution transfer either at law or in equity the property in goods already specifically identified and agreed upon", Mr. Aickin was, in his various submissions, content to accept the proposition that a document in the form of an offer to assign property, was to be taken as "executed" for present purposes, when the offer was accepted, so as to give rise to a contract rather than when the document happened to be signed. I have not been referred to authority on the precise point (although Mr. Brooking for the defendant referred me to Wm. Cory and Son Ltd v Inland Revenue Commissioners, [1965] AC 1088; [1965] 1 All ER 917, dealing with stamp duty), but I would think that some justification for this conclusion is to be found in the reasoning of Willes, J, in Reuss v Picksley (1866) LR 1 Exch 342, when deciding that for the purposes of the Statute of Frauds an offer in writing signed by the person to be charged was a sufficient note or memorandum of an agreement resulting from the acceptance of that offer. Indeed, any other conclusion would seem to make avoidance of the bills of sale legislation so easy as to make a travesty of it.

Mr. Aickin's first submission was that at the critical time, that is, when the chattel mortgage document first became operative as an agreement binding the plaintiff to assign personal chattels, she was not the owner of, and had no property in, the motor car which she could assign. His contention was that the property in the car vested in her subsequently. Accordingly, the document upon its execution could only amount to an agreement to assign the car, as and when it vested in her, that is, it related to future property. Akron Tyre Co Pty Ltd v Kittson (1951) 82 CLR 477; [1951] ALR 277, decided that an agreement in writing to assign after-acquired property was not a bill of sale, and this authority, Mr. Aickin submitted, covered the case of a person agreeing to make an assignment of property to which at the time he had no title. As a document, to amount to a bill of sale, must at the time of its execution operate as an assurance of property either at law or in equity, and as I fail to understand how a person can assign, as distinct from agree to assign, property which he has not got, I am in any case disposed to accept this general proposition. To make anything of it, however, it was necessary for Mr. Aickin to establish also the premise which made it relevant, namely that at the time the chattel mortgage document took effect as an agreement by reason of the defendant accepting the plaintiff's request for a loan, the property in the car had not vested in her. In support of this he contended that upon the proper construction of the relevant documents, and in the events which happened, the proper conclusion was that the credit request and the chattel mortgage agreement were accepted and became binding on 8 April 1965, or at the latest in the earlier part of 9 April; whereas no property in the motor car vested in the plaintiff until later on 9 April.

As fixing the time of the vesting of the property in the car in the plaintiff, Mr. Aickin relied upon CL3 of the sale order already referred to. Upon acceptance of this sales order, the plaintiff and Kellows are to be taken as having agreed that no property or rights in the motor car should pass to the plaintiff until the purchase price had been paid in full, by herself or on her behalf. As appeared from the evidence, the car was paid for on her behalf by the defendant. This payment was effected by the defendant's cheque posted to Kellows on 8 April, received by Kellows on 9 April, and cleared by the defendant's bank later on that day. On the general rule that payment by cheque amounts to completed payment only upon clearance of the cheque, Mr. Aickin contended that no property in the motor car passed to the plaintiff until that time later on 9 April.

As fixing the precise time when the credit request was accepted by the defendant, and, accordingly, the chattel mortgage first became operative as a binding agreement, Mr. Aickin relied upon CL6 of the credit request, to which reference has already been made. That provided alternative modes by which the defendant might accept the credit request. One was notification by telephone or otherwise to Kellows that the request had been accepted, another was payment of the purchase price of the car to Kellows.

Mr. Aickin's primary submission was that the defendant accepted the credit request on 8 April by making the requisite payment on that day. It was common ground that the defendant's cheque was not received by Kellows until the 9th, and cleared later on that day, but the contention was that within the meaning of CL6 payment to Kellows was effected upon the posting of the cheque, not upon its receipt or clearance. This conclusion was warranted, so it was said, because of the terms of a supplier's agreement dated 4 December 1963, between the defendant and Kellows, which was in force at all material times. By that agreement, which I would think had been carefully devised to facilitate the defendant's chattel mortgage plan as adopted in this case, Kellows agreed with the defendant, "that moneys which you may agree with the customer to pay to us on account of the purchase price of the goods referred to in the credit request, shall be deemed paid to us by your delivering or mailing a cheque to us". This particular submission of Mr. Aickin's involved the proposition that the word "payment" as used in CL3 of the sale order, meant something different from the word "payment" in CL6 of the credit request. I agree that in its context in the sale order "the payment in full", particularly as it is made a condition of the property in the car passing from Kellows to the purchaser, means, in the case of payment by cheque, completed and full payment by clearance of the cheque. On no principle that I can see could the plaintiff as purchaser invoke in her own favour the provisions of the supplier's agreement, to which she was not a party--that was res inter alios acta. On the other hand, I feel considerable force in the submission that in the context of CL6 of the credit request, where other modes of accepting this request without notice to the proposing borrower and short of payment of any description are authorized, that the mode of payment acceptable to and authorized by Kellows as between itself and the defendant is to be considered payment by the defendant to Kellows for purposes of that clause--and that a payment in legal tender or its equivalent is not essential. However, this interpretation of CL6 is not essential to Mr. Aickin's argument. Even if the act of posting the cheque is not a payment sufficient to accept the credit request, the receipt of the defendant's cheque by Kellows in the earlier part of 9 April would appear to have amounted to an acceptance as being a notification to Kellows that it had accepted the request for the loan, or to use the words of the clause, "that it undertook responsibility for the balance of the price".

As receipt of the cheque by Kellows necessarily preceded clearance of the cheque by the bank, the result was the same. When the agreement to give the chattel mortgage became binding, the plaintiff had no property in the car.

My acceptance of this submission, technical as I confess to having at first thought it when it was made, would suffice to support the conclusion that the chattel mortgage was not an assurance of personal chattels, and therefore not a bill of sale. However, Mr. Aickin made a further submission on the hypothesis that the property in the car vested, as Mr. Dwyer submitted, in the plaintiff simultaneously with the acceptance of the credit request and the operation of the chattel mortgage document as a binding agreement to assure personal chattels. This contention was to the effect that the chattel mortgage document was not a bill of sale because no assurance was effected by it, as distinct from resulting from it.

This submission necessitated a close examination and analysis of the precise terms and operation of this chattel mortgage document. After full consideration, I am persuaded that this submission also is sound and substantially for the reasons urged by Mr. Aickin. The chattel mortgage, as appears from its terms, was not intended of itself to operate as an assurance of property, merely upon acceptance of the credit request. The acceptance of the credit request, while converting the chattel mortgage document from an offer into an agreement binding the plaintiff to make an assurance of personal chattels, did not of itself give to the document the character of an assurance of property. What was made essential before the chattel mortgage could result in an assurance of the motor car, was the lending of the necessary moneys, and the purchase of the car with such loan moneys. Thus the document itself did not, in my opinion, effect an assurance, although by the operation of the document, no doubt, upon the making of the loan and its application in payment for the car, an assurance did result in equity if not at law. In the events which actually happened in the course of carrying out this transaction, the true character and operation of the chattel mortgage have, I think, tended to become obscured. This is so on the view that the same act, which amounted to an acceptance of the credit request and the payment by the defendant on behalf of the plaintiff of the loan moneys to Kellows as the purchase price of the car, also fulfilled the very condition upon which the plaintiff agreed to assign the car to the defendant by way of security. Had the transaction taken a different course, as it well might, the true character of the chattel mortgage as a document would have been more obvious.

As appears from CL6 thereof, the credit request might have been accepted independently of the making of the loan moneys available for the purchase of the car. Payment of the loan moneys to Kellows was one only of the alternative modes of acceptance. Equally, the credit request might have been accepted, for example, by the defendant simply notifying to Kellows its acceptance by telephone or otherwise and without at the time providing the loan moneys. In that case it would seem clear enough that at the time when the chattel mortgage would have become operative in the sense of becoming a binding agreement, it would not have effected an assurance of chattels. It would then have been an executory agreement to assign as and when thereafter the money agreed to be lent was in fact lent and applied in payment for the purchase price of the car. Consistently with the views expressed, both by Rich, J, and Dixon, J, as he then was, in Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1; [1937] ALR 432, when dealing with the analogous subject of assignment of book debts, it would appear that had the transaction, in fact, happened to take this course the chattel mortgage document would not itself have effected an assurance, although an assurance would, no doubt, on the loan being subsequently made and so applied have, to use the phrase of Rich, J, "arisen from operations under the instrument".

Can it make any relevant difference to the character of the document as one effecting an assurance of property or not that acceptance of the credit request happened to take the form that it did? Once it is kept clearly in mind that the agreement embodied in the chattel mortgage document was an agreement to assure chattels conditionally upon such chattels being purchased out of the loan moneys to be provided by the defendant, I consider the contention unanswerable that it was not the chattel mortgage document itself which effected the assurance of the car, but the act external to it of the lending of the moneys by the defendant and their being applied in payment of the price of the car--that the same act which made the chattel mortgage document binding as an agreement happened also to fulfil the very conditions upon which it was agreed that the assignment was to be given should, I consider, be treated as a fortuitous and irrelevant circumstance in determining the true character and operation of the chattel mortgage document itself. Whatever the mode of acceptance of the credit request, the chattel mortgage document, in my opinion, retained its character as an agreement to assign personal chattels as security to the lender of money upon such chattels being purchased with the loan moneys, and what effected the assurance was not the document itself but the act of lending of the money for such purpose.

It may appear that unless this chattel mortgage document is registrable the defendant will, by a clever and ingenious device, have succeeded in evading the policy of the bills of sale legislation, which, inter alia, is to prevent secret assignments of property which would leave the assignors who remained in possession of property, apparently as owners, with the appearance of prosperity, enabling them to obtain credit which would otherwise be denied. But this cannot properly weigh with me. As Dixon, J, said in Palette Shoes Pty. Ltd. v Krohn (38 CLR), at p. 28:

"Care should be taken by a court to avoid the error against which Cussen, J, gave a warning in R v Greig, [1931] VLR 413; [1931] ALR 309, and to guard against being 'led to hold a document, or the assurance contained in it, invalid merely by reason of the court's thinking that by a clever "device" (as it is called, to give it a bad name), a party would get outside the Act unless the court by a liberal construction of the Act or the existence of the court's ingenuity manages to prevent him'."

The conclusion I reach, then, is that all grounds of attack upon the chattel mortgage under which the defendant was given power to seize and take possession of the plaintiff's motor car upon default in repayment of instalments of loan money fail, and as there is no claim that the power if validly exercisable was not duly exercised, there must be judgment for the defendant on the plaintiff's claim.

By its counter-claim, delivered on or about 8 September 1966, the defendant has claimed the balance of the principal moneys remaining unpaid of the loan, together with the proportion of interest at the rate stipulated in the loan agreement calculated up to the date of the demand for repayment, that being 19 August 1966.

It was not in dispute that by the terms of the contract of loan the defendant was, in the events which happened, entitled to demand such payment. Nor was it disputed that the plaintiff, having made such default, the defendant, on or about 19 August 1966, duly made such demand. The demand not having been complied with, the defendant accordingly is prima facie entitled to judgment on its counter-claim.

By leave granted at the trial I allowed the plaintiff to raise, as a ground of defence to counter-claim, s30 of the Money Lenders Act. That provides, so far as material:--

"(1)

In respect of every contract whether made before or after the commencement of this Act for the repayment of money lent by a money lender, the money lender shall, on any reasonable demand in writing being made by the borrower at any time during the continuance of the contract, supply to the borrower a statement signed by the money lender or his agent showing--

(a)

the date on which the loan was made, the amount of the principal of the loan and the rate per centum per annum of interest charged;

(b)

the amount of any payment received by the money lender in respect of the loan and the date on which it was made;

(c)

the amount of every sum due to the money lender but unpaid and the date upon which it became due, and the amount of interest accrued due and unpaid in respect of every sum, and

(d)

the amount of every sum not yet due which remains outstanding and the date upon which it will become due.

"(2)

...

"(3)

If a money lender to whom a demand has been made under this section fails without reasonable excuse to comply therewith within one month after the demand has been made, he shall not, so long as the default continues, be entitled to sue for or recover any sum due under the contract on account either of principal or interest, and it shall not be chargeable in respect of the period of default, and if such default is made or continued after proceedings have ceased to lie"--then a penalty is imposed.

On or about 2 September 1966, after this action had commenced and was pending, the plaintiff, by demand in writing, required the defendant to provide her with a statement giving the particulars of the loan required by s30.

On 29 September the defendant delivered what purported to be a statement in compliance with s30. This statement, so the plaintiff submitted, failed to comply with the requirements under subs(1)(c) in that it did not show the payment of 13 pounds made by the plaintiff to the defendant on 22 November 1965 in connexion with the extension of the loan agreement. In no other respect, however, was it alleged that there had been any failure by the defendant to comply strictly with the statutory particulars.

The contention was that this was a reasonable demand; that the defendant had failed without reasonable cause to comply with it within a month or at all, and so long as its default continued it was precluded from recovering any sum due under the loan contract.

For answer Mr. Aickin relied on a variety of submissions. The demand was not a reasonable one. The failure to comply with it, if there was a failure, was not without reasonable excuse; in any case there was no failure within the meaning of subs(3) to comply with the demand, and finally that the demand was made too late to affect the counter-claim which had been delivered before the period of one month allowed had expired.

The Act provides no guide for determining whether a demand for information is reasonable or not. So far as I can see, the only ground for treating this demand as other than reasonable is that prior thereto the plaintiff had commenced litigation to have it determined whether the defendant was lawfully entitled to seize her motor car under its security, and the defendant had made demand for repayment of the loan in full with interest. In the absence of authority compelling a different conclusion--and none was cited to me--I am not prepared to hold that the demand was other than reasonable within the meaning of the section. That the defendant purported to comply with it without objection perhaps provides some evidence of its reasonableness.

Where there has been a failure by a money lender to comply with a reasonable demand for information regarding the state of the loan, the severe penalties imposed under subs(3) attach only if the failure has been without reasonable excuse. On general principles, and having regard to the evident policy of this enactment, I consider that the onus lies on the money lender to prove that he had reasonable excuse for not complying. The defendant's excuse, if any, for not complying with the demand, if it did not, does not appear from any evidence tendered on its behalf. Although Mr. Aickin's submission in argument that the excuse no doubt was that his client thought it unnecessary for compliance with the section to state the fact that the 13 pounds had been paid in November 1965 seems a highly probable explanation, I am disposed to agree with Mr. Dwyer that there should have been evidence of this fact before I could rely on it.

On the issue whether subs(1)(b) required that the fact of the payment of 13 pounds by the plaintiff should have been shown, I agree with Mr. Dwyer that in strictness it should. The expression "payments made in respect of the loan" is wide enough to include such payment, and I agree that this Act must be strictly construed. It would seem to amount to a payment of interest within the wide definition of interest in s3. The more difficult questions I feel are whether the omission to state this particular payment was a material omission and, if not, whether by the mere omission of an immaterial particular, a money lender fails within the meaning of subs(3) to comply with a demand under the section. The view I have formed is that the omission was not a material one. It is not alleged by the plaintiff in her pleading, nor does it otherwise appear, that this omission has resulted in the information actually given being other than materially correct, nor that the information actually given has failed to provide full and accurate information as to the state of the accounts, both as to principal and interest outstanding at the date of the statement. In a real sense this payment which was of a special character as being consideration for an extension arrangement, did not in any relevant sense enter into the accounts between the parties, and, no doubt, for that reason was recorded elsewhere in the defendant's records. In the events which happened the only significance of showing that payment in the statement would have been to draw attention to the extension agreement as to the explanation why it was given, but in the events which happened this extension agreement ceased to have any materiality. However, the question remains whether s30(3) demands a literal compliance with all the particulars required to be shown under subs(1), whether material or not. This raises the question what amounts to a failure within the meaning of s30(3) to comply with the demand. There is, of course, such a failure when the demand is simply ignored, but when some although not all of the required information is given, I consider that the test is that stated in the following passage in Stone and Meston, Law Relating to Money Lenders, 4th ed., at p. 80:

"In such cases the test is does the information actually given by the money lender constitute a material variation from the information which is required to be given under the section, and is the information which is given materially correct."

See, too, Colin Campbell Ltd v Christie, [1935] SLTR 37, and Pannam, Law of Money Lenders, p. 218.

My conclusion is that there has not been such a failure to comply with the plaintiff's demand as to attract the sanctions under subs(3), and that makes it unnecessary to express any concluded view on Mr. Aickin's final submission, that the demand came too late to affect the defendant's counter-claim. The sanctions in question attach while the money lender is in default in complying with the demand for information. No question of default arises until after a month from the demand. In this case, the defendant had delivered its counter-claim on 8 September, that is, within the month from the date of the demand. The argument was that the sanctions for default were in these circumstances inapplicable to the proceedings on this counter-claim. The sanctions prescribed are that the money lender, whilst in default, shall not be entitled "to sue for or recover" any sum due under the contract. Mr. Aickin's contention, as I understand it, was that the prohibition against suing was inapplicable because the defendant had already sued, by delivery of its counter-claim, before any default had occurred. The prohibition against recovering any sum due referred, he said, not to legal proceedings for the recovery of the loan, but to recovery extra- judicially, by enforcement of a security.

Mr. Dwyer, on the other hand, contended that recovery included recovery by judgment, and that if s30 was infringed, I would be precluded from giving judgment in the counter-claim, notwithstanding that the counter-claim had been delivered prior to any default.

As at present advised, although not deciding the point, I would feel disposed to agree with Mr. Aickin's submission. But in any case, had it become necessary, I would have been disposed to give the defendant the opportunity of rectifying what I regard as a technical omission from its statement before finally disposing of the counter-claim.

In conclusion, I wish to say that I am much indebted to counsel in this case for their able and helpful arguments. I should say it has not been due to any lack of clarity or pertinacity in the presentation of his case that I felt unable to accede to so many of the points ably argued by Mr. Dwyer.

In the result, then, I hold that the defence to the counter-claim founded on s30 of the Money Lenders Act fails, and the defendant is entitled to judgment thereon, that is, for the principal moneys and interest claimed in the counter-claim. In addition to its claim for repayment of the balance of the loan outstanding and interest, the defendant has claimed for repossession expenses, and for storage of the motor car pending disposal. These claims amount to $17 and $16 respectively. There has been no dispute as to the defendant's right to recover such amounts under the terms of the chattel mortgage should it be held, as I have held, that the chattel mortgage is a valid and enforceable security. Accordingly there should be judgment for the defendant in the action, judgment for the defendant on the counter-claim for $996 for principal and interest owing to the date of the demand, and for $33 for repossession expenses and storage charges.

Judgment for defendant on claim and counter-claim.