Supreme Court New South Wales Medium Neutral Citation: Auto Moto Corporation Pty Ltd v SMP Solutions Pty Ltd [2013] NSWSC 1403 Hearing dates: 16 and 18 September 2013 Decision date: 19 September 2013 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Summons dismissed; Cross-Claim allowed Catchwords: SALE OF GOODS - personal property - title - principal and agent - authority of agent to bind - whether contract created a "security interest" for the purposes of the Personal Property Securities Act 2009 (Cth) EQUITY - personal property - title - competing claims of ownership - whether there is an equitable interest that is a "security interest" for the purposes of the Personal Property Securities Act 2009 (Cth) Legislation Cited: Evidence Act 1995 Personal Property Securities Act 2009 (Cth) Sale of Goods Act 1923 Cases Cited: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 Category: Principal judgment Parties: Auto Moto Corporation Pty Limited (plaintiff) SMP Solutions Pty Limited (defendant) Representation: Counsel: M K Condon SC (plaintiff) M Ashhurst SC with A Kaufmann (defendant) Solicitors: Sage Solicitors (plaintiff) Owen Hodge Lawyers (defendant) File Number(s): SC 2013/152228 Publication restriction: Nil EX TEMPORE Judgment (REVISED) 1These proceedings concern a Lamborghini Aventador ("the Vehicle"). 2The plaintiff claims: - (1)an order that the defendant immediately deliver up, or cause to be delivered to it, the Vehicle; (2)an order that the Registrar of the Personal Property Securities Register ("PPSR") remove all interests of the defendant in the Vehicle; (3)an order that the defendant and its officers, servants and agents be enjoined from causing, or to be entered upon the register, any interest in respect of the Vehicle; (4)an order that the defendant do all things necessary to effect cancellation of its registration as the owner of the Vehicle with the Roads and Maritime Services ("RMS"); and (5)an order that the defendant transfer title and registration of the Vehicle to the plaintiff. 3The basis of the plaintiff's claim is that it has an interest in the Vehicle and, in particular, a "security interest" for the purposes of the Personal Property Securities Act 2009 (Cth) ("PPSA"). 4The facts are somewhat complicated, but, in view of the conclusions to which I have come, it is not necessary for me to deal with many of the factual issues. Nor is it necessary for me to deal with any of the issues which were raised concerning the proper construction of the PPSA. That is because my conclusion is that the plaintiff's claim fails at the threshold. 5It is common ground that Haberfield Automotive Pty Ltd (now in liquidation) ("Haberfield") acquired the Vehicle in May 2012. Between 18 May 2012 and 18 August 2012, Haberfield was registered with the RMS as the owner of the Vehicle. 6According to records maintained with the Australian Securities and Investments Commission ("ASIC"), Haberfield was registered on 12 May 2011. At all times its sole director and shareholder was Mr Joseph Allam and its registered office and place of business was at 2 Haberfield Road, Haberfield. 7The person at Haberfield with whom the plaintiff, through its sole director, Mr Muzio Cantarella, dealt with was a Mr Simon Wakim. 8Mr Cantarella said that in about July 2011, Mr Wakim contacted him and they had a conversation to the following effect: - "[Mr Wakim]: I have started a new business and it is called Haberfield Automotive. I am buying and selling cars. Are you interested in buying and selling cars with me? [Mr Cantarella]: Why don't you come and see me." 9Although Mr Wakim said in that conversation, "I have started a new business and it is called Haberfield Automotive", so far as the evidence revealed, Mr Wakim was at no time either a director or a shareholder of Haberfield. 10Mr Cantarella said that in about August 2011, Mr Wakim came to his house and that they had a further conversation to the following effect: - "[Mr Wakim]: I am working from home as Haberfield Automotive. I still have my clients from the Wakim Prestige days and there is a demand for prestige cars. Do you want to finance me to buy cars and I will give you a good return on your money. [Mr Cantarella]: How much do you need and what return would I get? [Mr Wakim]: I would probably need up to a $1 million. I am happy to split the profit I make on the cars with you. [Mr Cantarella]: I will think about it. I have a red 599 Ferrari. Do you have a buyer? [Mr Wakim]: Yeah I have someone who would be interested. [Mr Cantarella]: Ok, I will do this with you, however, I want to draw up an agreement between us. [Mr Wakim]: Yes that is fine. Do you want me to sell the Ferrari for you? [Mr Cantarella]: That would be good. Let me know if the buyer is keen." 11Mr Cantarella said that on or about 31 August 2011, Mr Wakim told him that he, Mr Wakim, had sold the Ferrari referred to in the conversation in the preceding paragraph, and that he required a tax invoice for the sale to enable the buyer to obtain finance. 12Mr Cantarella said that, after confirming with Mr Wakim that the buyer was proceeding with the Ferrari purchase, he commenced drafting what he described as a "Secured Loan Agreement". 13Mr Cantarella said on 21 September 2011, Mr Wakim again attended his home when it was time to collect the Ferrari. Mr Cantarella said that before he gave the Ferrari to Mr Wakim, they had a conversation as follows: - "[Mr Cantarella]: I am happy to finance you up to $1million. I have drafted an agreement to protect my money. You can see that I have made your company the borrower and you the guarantor." 14Mr Cantarella said that he saw Mr Wakim read the proposed agreement and the conversation continued: - "[Mr Cantarella]: I am happy to finance you up to $1 million. I have drafted an agreement to protect my money. You can see that I have made your company the borrower and you the guarantor. [Mr Cantarella] saw [Mr Wakim] read the Secured Loan Agreement. [Mr Wakim]: That's fine. What's the interest rate on this agreement? [Mr Cantarella]: Well my bank charges 7.11% on all overdrafts. So you'd just need to cover that. [Mr Wakim]: That's fine. [Mr Cantarella]: I will give you the Ferrari to start with." 15Mr Cantarella said that Mr Wakim then took the "Secured Loan Agreement", by then signed by Mr Cantarella for the plaintiff and "did not say anything further about it". 16The first basis upon which the plaintiff claims that it has a "security interest" in the vehicle is by reason of that "Secured Loan Agreement". 17The document is in fact called "Loan Agreement". It is dated 21 September 2011. It is signed by Mr Cantarella. It is not signed by Mr Wakim or anyone else purporting to act on behalf of Haberfield. The relevant parts of the Loan Agreement are as follows: - "Whereas: A. The Lender will supply Vehicles and Capital up to the amount of $1,000,000.00 for the Borrower to use a [sic] trading stock. B. The Borrower is indebted to the Lender for the amount set out above. C. The Lender may advance further funding to the Borrower by way of loan. D. The Guarantor agrees to guarantee the Borrowers obligations to the Lender in this Loan agreement. The Parties agree as follows: 1. The Borrower acknowledges the Lender has/will advance up to the sum of $1,000,000.00. This loan is secured. 2. The Borrower acknowledges the Term of the Loan Agreement. Repayment of the loan: 1. All monies lent to the Borrower must be paid to the Lender immediately upon receipt by the Borrower of a written demand from the Lender requiring the Borrower to repay the Loan. Security 1. The Borrower agrees to offer a charge to the Lender over stock held (Vehicles) by the borrower. 2. The Security is provided by way of mortgage to the Lender and the Charge will be a fixed charge over the Borrowers interest in the Security up to the value of the Loan." 18Consistently with Recital A to the Loan Agreement, from time to time, the plaintiff delivered vehicles to Mr Wakim at his home. Each delivery was accompanied by a tax invoice, naming the car and a "balance payable" for the car and concluding: - "Title to the vehicle sold shall not pass to the purchaser if any payment paid in part or full payment for such is dishonoured." 19As I shall mention later, there is no evidence that Mr Wakim or anyone else purporting to act for Haberfield actually paid cash for any of those vehicles. 20The plaintiff relies upon the "Charge" referred to under the heading "Security" in the Loan Agreement as creating a "security interest" in the Vehicle for the purposes of s 12 of the PPSA. 21A question arises as to Mr Wakim's authority to commit Haberfield to the transaction referred to in the Loan Agreement. 22As I have mentioned, the evidence does not explain how it was that Mr Wakim could assert that he had "started a new business and it is called Haberfield Automotive". He was neither a director nor a shareholder of that company. He was not called as a witness, nor was Mr Allam, to explain what relationship Mr Wakim had with Haberfield and what authority Mr Wakim had to act on behalf of Haberfield. Further, the constitution of Haberfield was not placed into evidence, with the result that I do not know what authority anyone, other than a director of Haberfield, would have to commit it to a transaction of the kind referred to in the Loan Agreement. 23Mr Condon SC, who appeared for the plaintiff, submitted: - "Whilst Mr Wakim was not a director of Haberfield, it is plain that he was the de facto controller of that company and authorised to bind it by contract. He ran the company's activities on a day to day basis, without recourse to Haberfield's nominal director. Mrs Cantarella's evidence is that: a. she only ever dealt with Mr Wakim - and never with Mr Allam; b. she would only ever deal with Mr Wakim in relation to the sale and purchase of cars - and Mr Wakim never referred to his seeking approval from a third part about such transactions; c. she would attend his house to pick up or drop off the car, or to collect invoices; and d. she would speak with him on a day to day basis about cars, including their pricing." 24I do not accept the submission that it follows from the evidence of Mrs Adele Cantarella, to which reference was made, that it is "plain" that Mr Wakim was a "de facto controller" of Haberfield and authorised to bind it by contract. 25In my view, the evidence reveals no more than that Mr Wakim bought and sold cars from his home, evidently on behalf of Haberfield, and that Mrs Cantarella would from time to time attend Mr Wakim's home to drop off or collect cars. 26There is no evidence as to where Mr Wakim's home was located. There is no suggestion in the evidence that Mr Wakim's home was located at the Haberfield address, being the registered office and place of business of Haberfield, as stated in the ASIC records. 27Mr Cantarella said that: - "Throughout my dealings with [Haberfield], I only ever dealt with Simon Wakim. I never had any dealings with Joseph Alam or anybody else and Simon Wakim never mentioned anybody else to me. I would attend Simon Wakim's house and we would negotiate about the purchase and sale of prestige vehicles. Simon would be the one to book out the cars and buy the cars. We would generally speak weekly and probably buy and sell cars monthly." 28In my opinion, that evidence casts no light on what authority Mr Wakim actually had. I accept Mr Wakim must have had authority from Haberfield to buy and sell cars. The evidence establishes that he did that over a number of years. It cannot, in my opinion, follow that he had authority to enter into a charge of Haberfield's assets. 29I accept the following submission made by Mr Ashhurst SC, who appeared with Mr Kaufmann, for the defendant: - "The Plaintiff's proposition is that because Mr Wakim had authority to buy and sell cars for Haberfield he must have had authority to enter into a charge of that company's assets. That is like saying the sales manager for a Ford Dealership must have the authority to enter into a charge of that company's assets with its floor plan financier." 30My conclusion is that the evidence does not establish that Mr Wakim had authority to commit Haberfield to the Loan Agreement. 31Further, there is no evidence that Mr Wakim's conduct (let alone that of Haberfield) was "referable only to an acceptance of the plaintiff's offer" (see Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 at [5] - [9]; referring to Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 535F-G). 32The Loan Agreement purported to record an existing debt of $1,000,000 as at 21 September 2011 and recited that the plaintiff "may advance money by way of loan". 33What actually happened was that the plaintiff did not advance funds to Haberfield. Rather, it delivered cars on the basis that title would not pass until Haberfield paid for the cars (except for the Ferrari, which, as I have stated, Mr Cantarella said that he would "give you... to start with"). 34Haberfield "paid" for the cars by delivering to the plaintiff other cars in respect of which there was an "agreed value". 35In those circumstances, I am not able to see any conduct of the plaintiff referable only to an agreement to loan money against security of stock. There was no loan because, except for the Ferrari, the cars remained the property of the plaintiff. There was no stock for security for the same reason. 36Thus, this aspect of the plaintiff's case fails. 37Alternatively, the plaintiff relies upon a conversation between Mr Cantarella and Mr Wakim on 28 September 2012 concerning the Vehicle itself. Mr Cantarella said that on 28 September 2012, Mr Wakim asked him if the plaintiff would be interested in finding a buyer for the Vehicle and that the following conversation took place: - "[Mr Wakim]: Would you be able to find a buyer for a Lamborghini Aventador for me? I [Mr Cantarella] had understood from this question that Simon Wakim was asking me to sell the Vehicle as an agent for Haberfield and I was concerned that Auto Moto would not be paid its commission for locating a purchaser. I then said to him: [Mr Cantarella]: I don't know. I'm hesitant to say yes because you and Haberfield already owe me over $700,000.00 [Mr Wakim]: You could keep the proceeds from the sale of the Aventador in reduction of the debt. [Mr Cantarella]: Okay I agree to that. Any payment received from the sale will go towards your debt." 38That conversation was said to give rise to an agreement described in the following terms in the plaintiff's Commercial List Statement: - "[The plaintiff] and Haberfield entered into an agreement pursuant to which Haberfield authorised [the plaintiff] to sell the Vehicle on its behalf and retain the proceeds thereof to the extent necessary to discharge the debt it then owed [the plaintiff]." 39That agreement was said to confer on the plaintiff "an equitable interest in the vehicle", which comprised a "security interest" for the purposes of s 12(1) of the PPSA. 40That submission, however, assumes that Mr Wakim had authority to confer upon the plaintiff the right to retain the entirety of the proceeds of the sale of the Vehicle. Just as I have concluded that Mr Wakim had no authority to commit Haberfield to the promises in the Loan Agreement, I conclude he had no authority to commit Haberfield to such an agreement concerning the proceeds of sale of the Vehicle. 41In any event, the conversation to which I have referred shows that if, contrary to what I have held, the plaintiff ever did have a security interest in the Vehicle, that interest was thereby converted to an interest in the proceeds of sale of the Vehicle. 42The plaintiff has failed to establish any interest in the Vehicle or indeed the proceeds of sale of the Vehicle. For that reason, the plaintiff's Summons must be dismissed. 43By its Cross-Summons, the defendant seeks an order that the plaintiff remove any recorded interest in respect of the Vehicle from the PPSR. 44Mr Ashhurst accepted that, in order to have standing to seek that order, the defendant would have to show that it has title to the Vehicle. 45In my opinion, the defendant does have title to the Vehicle. 46Mr Ashhurst relied upon s 26 of the Sale of Goods Act 1923 ("SGA"): - "(1) Subject to the provisions of this Act, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by the owner's conduct precluded from denying the seller's authority to sell. (2) Nothing in this Act shall affect: (a) the provisions of the Factors (Mercantile Agents) Act, 1923 or of the Personal Property Securities Act 2009 of the Commonwealth, (b) the validity of any contract of sale under any special common law or statutory power of sale, or under the order of a court of competent jurisdiction." 47As I said, there was no dispute that at the commencement of the dealings to which I have referred, Haberfield was the owner of the Vehicle. I have mentioned it was registered with the RMS as owner from 18 May 2012 to 18 August 2012. 48The defendant purchased the Vehicle from a company called Belcooma Pty Ltd, which was associated with a Mr George Savva. Belcooma was not at any stage the owner of the Vehicle but, according to the defendant, was a party on whose authority, or with whose consent, the owner (Haberfield) sold the Vehicle (for the purposes of s 26 of the SGA). 49The defendant contended it received good title from Haberfield through its selling agents; being the plaintiff, and the sub-agent appointed by the plaintiff, Belcooma. 50As to the appointment by Haberfield of the plaintiff as its selling agent, the defendant relies upon the conversation of 28 September 2012 between Mr Wakim and Mr Cantarella which I have set out above and dealt with in the context of the plaintiff's claim. As I have mentioned, it appears clear that Mr Wakim did have authority to buy and sell cars and thus had authority, in my opinion, to appoint the plaintiff as its selling agent. 51In my opinion, the effect of the conversation of 28 September 2012 was that Haberfield did appoint the plaintiff as its selling agent. Consistently with that appointment, Mr Cantarella took possession of the Vehicle and stored it at his garage at Dural. Mr Cantarella agreed that he took possession "as Mr Wakim's selling agent". 52The defendant also relies upon a further conversation between Mr Cantarella and Mr Wakim shortly after 28 September 2012 concerning a company called Crown Auto Gallery Pty Ltd (which company evidently has no association directly with Haberfield, Mr Cantarella or Mr Wakim). That conversation was to the following effect: - "[Mr Wakim]: I'm going to have Crown Auto Gallery hold the Lamborghini for sale on their books. [Mr Cantarella]: Why are you doing that? [Mr Wakim]: Haberfield is having some problems and I think it would be better on their books. Don't worry Crown will only be booking out the vehicle as they have a retail licence. They aren't responsible for selling it." 53The role of Crown Auto is to me somewhat of a mystery. However, it became the registered owner of the Vehicle in the records of the RMS from 18 August 2012 until 15 October 2012. The inference I draw is that Mr Wakim caused Haberfield to bring that about. 54The defendant submits, and I accept, that the plaintiff, as Haberfield's agent, appointed Belcooma as a sub-agent. 55Mr Cantarella described his dealings with Belcooma, through Mr Savva, as follows. 56Mr Cantarella said that in early October 2012 Mr Savva contacted him and said: "Crown Auto told me you are selling a Lamborghini Aventador". Mr Cantarella said he knew Mr Savva because of previous business dealings. 57Mr Cantarella said that on 12 October 2012, Mr Savva and he had a conversation to the following effect: - "[Mr Savva]: A firm called DIB Solicitors is interested in purchasing the Lamborghini. They're willing to pay $650,000. [Mr Cantarella]: Okay we have a deal." 58Mr Cantarella said that three days later, on 15 October 2012, Mr Savva said: "I'd prefer to invoice DIB Solicitors myself and I'll pay you directly". 59Mr Cantarella deposed: - "I instructed Crown to issue an invoice to George Savva's company Belcooma. Furthermore, [the plaintiff] only has a wholesale licence it is unable to directly invoice retail purchasers. As such it was necessary for Crown to invoice Belcooma because they had a general/retailer licence." 60The invoice prepared by Crown Auto, evidently on the instructions of Mr Cantarella, was addressed to Belcooma and said that the amount owing was $650,000. 61In those circumstances, my opinion is that, as Mr Ashhurst submitted, the plaintiff appointed Belcooma as its sub-agent to sell the Vehicle. That is confirmed by a conversation that Mr Savva had with Mrs Cantarella (that is Mr Cantarella's wife) to which I refer below. 62Consistently with that proposition, Mr Cantarella, on behalf of the plaintiff, allowed Mr Savva, on behalf of Belcooma, to take possession of the Vehicle. 63In circumstances unexplained in the evidence, the sale to "DIB Solicitors" did not proceed. Instead, in the circumstances I describe below, Mr Savva for Belcooma purported to sell the Vehicle to the defendant for $700,000. 64In the meantime, Belcooma purported to pay the plaintiff for the Vehicle, drew a cheque in favour of the plaintiff for $650,000 and delivered that cheque to the plaintiff. The cheque was not met on presentation. 65In my opinion, that did not affect Belcooma's authority to sell the car on behalf of the plaintiff (and thus on behalf of Haberfield). 66Mr Ashhurst said in his written submissions: - "If that Belcooma cheque [for $650,000 in favour of the plaintiff] had been met on presentation, neither Haberfield nor any party claiming through Haberfield (ie the plaintiff) could possibly claim that title in the Vehicle had not passed to the defendant." 67In the meantime, in or about late September 2012, Mr Savva contacted Mr Stoyan Kiceec, the general manager of the defendant, and told him that he, Mr Savva, had a Lamborghini for sale for $700,000, with a potential buyer willing to pay $780,000. 68On 24 October 2012, Mr Kiceec made arrangements to raise the purchase price for the Vehicle. Around 25 October 2012, Mr Savva demonstrated the Vehicle to Mr Kiceec and showed Mr Kiceec the tax invoice for Crown Auto in Belcooma's favour. 69Mr Kiceec gave this evidence as to what followed: - "[Mr Kiceec]: What's that George? It's an invoice to you - it doesn't mean anything. I want to be sure you're authorised to sell the [Vehicle]. [Mr Savva]: Okay. I'll get Adele on the phone and you'll see that I can sell it. I [Mr Kiceec] then saw Mr Savva dial a number on his mobile phone and I heard part of a conversation which Mr Savva put on loudspeaker in his mobile phone between Mr Savva and a woman, who Mr Savva referred to as Adele, to the following effect: [Mr Savva]: The buyer of [Vehicle] has got concerned that it's owned by someone else and he wants to know what's going on... ... [Mrs Cantarella]: It's my [Vehicle] - that [Vehicle] doesn't belong to anybody but me. [Mr Savva]: Okay, thanks Adele. [Mrs Cantarella]: It doesn't matter who owned the car before just get it sorted out and ring me back in the next ten minutes. Tell them Simon's spewing because he wants to be involved in selling the [Vehicle] that's all. Get it done ASAP - I want to know if the [Vehicle] is getting paid otherwise we'll go and get the [Vehicle]. [Mr Savva]: Okay. Thanks, Adele - bye. [Mrs Cantarella]: Bye." 70Insofar as Mr Kiceec gave evidence of overhearing a conversation between Mr Savva and "Adele", Mr Condon submitted that I should find that this conversation did not take place. 71Mrs Cantarella did not, however, deny the conversation took place. She said she could not recall having had any conversation with Mr Savva on loudspeaker. She also said in cross-examination that Mr Savva had not mentioned to her anyone else, other than DIB Solicitors, as a prospective purchaser of the Vehicle. 72I do not find that evidence to be inconsistent with Mr Kiceec's account of the conversation. Mrs Cantarella may well not have realised that she was speaking with Mr Savva on speakerphone. Further, on Mr Kiceec's account of the conversation, Mr Savva did not mention who the proposed purchaser was. He simply referred to "the buyer" of the Vehicle. 73Mr Condon submitted that I should exercise great care in accepting Mr Kiceec's evidence and submitted that various aspects of his evidence "excite disbelief". He pointed in particular to Mr Kiceec's involvement with Mr Savva in the creation of documents which suggested that the sale price of the Vehicle from Belcooma to the defendant was $850,000, rather than $700,000 (evidently to avoid capital gains tax and to "maintain market in the Vehicle", to use Mr Kiceec's language). That evidence was given under the protection of a s 128 Evidence Act 1995 certificate. 74Nonetheless, I found Mr Kiceec to be a credible witness. He readily agreed his involvement in the transactions to which I have just referred; he seemed to fully understand the less than desirable aspects of them. Otherwise, he presented to me as a witness who had a clear memory of what had happened and he was doing his best to tell the truth about those matters. 75Further, the words that Mr Kiceec attributes to "Adele" (who Mr Condon accepts must be Mrs Cantarella, if the conversation took place) were consistent with SMS messages she had sent to Mr Savva. 76According to Mr Kiceec's account of the conversation, Mrs Cantarella said: "I want to know if the car is getting paid otherwise we'll go and get the car". That is consistent with a number of SMS messages that Mrs Cantarella sent to Mr Savva, including: - "I'm trying to call u!!! Pls I have been texting u no reply. What is going on. Car not paid!!! I need the car back!!! Otherwise u can deal with these guys direct. Pls no games." 77There were other messages, in more colourful terms, to the same effect. 78In those circumstances, I find that the conversation to which Mr Kiceec deposed, took place. 79Mr Condon accepted that, assuming the conversation took place, when "Adele" (Mrs Cantarella) said, "It's my [Vehicle]", she must have been speaking on behalf of the plaintiff. She was thus confirming Mr Savva had Belcooma's authority to sell the Vehicle on the plaintiff's (and thus Haberfield's) behalf. Indeed, she was exhorting Mr Savva in strong terms to get on with it. 80After the conversation, Mr Kiceec agreed for the defendant to purchase the vehicle, subject to seeing registration documentation. Mr Savva told Mr Kiceec to make cheques payable to Audi Australia Pty Ltd. 81On 26 October 2012, Mr Savva provided Mr Kiceec with registration documents in the name of Belcooma. There is no explanation in the evidence as to how those documents were created or how that document was created. 82Mr Savva also provided Mr Kiceec with a tax invoice from "Prestige Car Connoisseurs" (a trading name for Belcooma) in the sum of $850,000 (although it was common ground that the real purchase price was in fact $700,000). 83Mr Savva showed Mr Kiceec that there was no interest registered in respect of the Vehicle on the PPSR. Mr Kiceec, on behalf of the defendants, gave Mr Savva cheques totalling $683,483.34 (payable to Audi Australia Ltd) and took possession of the Vehicle. 84On 31 October 2012, Mr Kiceec made a final payment to Mr Savva of $16,516.66, completing the payment total of $700,000. 85Mr Savva died in a road accident on 14 November 2012. 86On 14 November 2012, Mr Kiceec became aware that Mr Savva had died that day and that the defendant's interest was no longer recorded on the PPSR. He caused a further registration of the defendant's interest of the vehicle to be created in the PPSR. 87Mr Condon put to Mr Kiceec, and submitted that I should find, that the transaction between Mr Savva and Mr Kiceec was in effect a sham and that the true position was that Mr Kiceec had caused the defendant to lend the $700,000 to Mr Savva or his company. Mr Condon pointed to the fact that documents produced on subpoena by Audi Australia showed that Mr Savva, or Belcooma, owed it exactly $683,483.24 (the amount that the defendant paid to Belcooma on 26 October 2012) on 21 September 2012 in respect of a proposed purchase by Belcooma of an Audi franchise in Gosford. 88I do not see that these circumstances suggest that the arrangement between the defendant and Belcooma was not genuine. All it shows is that, consistently with the evidence Mr Kiceec gave about the matter, Belcooma proposed to (and perhaps did) use the funds paid to it by the defendant to discharge a debt it owed to Audi. 89In those circumstances, I find that the defendant acquired good title to the Vehicle from Belcooma, as a party authorised by the owner of the Vehicle, Haberfield (through its agent, the plaintiff.) 90That establishes a sufficient basis for the defendant to have standing to seek the orders in the Cross-Claim. 91I make the following orders: - (1)The Summons is dismissed. (2)I make an order in accordance with par 1 of the Cross-Claim. (3)I stay order (2) until 5pm on 30 September 2013. (4)I order that the plaintiff pay the defendant's costs of the Summons and the Cross-Claim. (5)I order that the exhibits and subpoenaed material may be returned forthwith. Any exhibits returned must be retained intact by the party or person that produced them, until the expiry of the time to file an appeal, or until any appeal has been determined. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 September 2013