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Project finance and the ‘ipso facto’ reforms

From 1 July 2018, new laws limit financiers’ rights to accelerate loans and enforce security when a company is in administration or under receivership. There are many exceptions. Mostly, project financiers will fall within the exceptions and be able to accelerate and enforce, but there are some gaps. The laws will also help project financiers […]

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PPSA meets the Constitution: the OneSteel case

Section 51(xxxi) of the Constitution allows the Commonwealth to make laws for the acquisition of property on just terms. Australian film lovers will remember the section as central to the plot in The Castle, where Daryl Kerrigan saves his house from acquisition for an airport extension, persuading the High Court that no money can justly […]

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Mere contractual promises are not security interests

In two linked cases, Beach J of the Federal Court has unsurprisingly held that: a contractual indemnity is not a security interest, and an undertaking as to damages given to a court is not a security interest. Unjustified financing statements The two cases are National Australia Bank Ltd v Garrett [2016] FCA 714 and Treasury […]

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Was a retention of title claim ‘unsecured’ before the PPSA?

Within a week, two courts have considered this question and reached opposite conclusions. The Federal Court says ‘no’; the Victorian Supreme Court says ‘yes’. Why it matters The issue is important to liquidators seeking to claw back preferential payments made to individual creditors before liquidation began, for redistribution on an equal basis to creditors generally. […]

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Take care: trust distribution resolutions taken seriously by High Court

In Fischer v Nemeske [2016] HCA 11, the High Court has ruled on a rather vague resolution by which a Trustee resolved to make distributions, never paid, to beneficiaries. The outcome of the case shows the importance of taking care with these resolutions. They may create debts that can be enforced later by the beneficiaries. […]

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Mining joint ventures, default purchase options and security interests

Mining joint venture agreements often give a joint venturer a menu of up to 3 enforcement options when a co-venturer defaults in making required cash contributions: enforce a cross charge, appointing a receiver or selling up the defaulter’s interest; a default purchase option, exercising a right to buy out the defaulter’s interest at (or just […]

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Expensive failure to register on PPSR: Forge v GE

Forge Group Power Pty Limited v General Electric International Inc [2016] NSWSC 52 The long-awaited Forge decision is out. Mining services company Forge went into voluntary administration 2 years ago, then into liquidation. Forge had leased turbines, said in press reports to be worth around $50 million, from GE. GE failed to make a PPS […]

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Sentencing reform in Victoria: interesting times

This year should bring interesting developments in the law of criminal sentencing in Victoria. The story begins: baseline offences In November 2014, the baseline sentencing provisions in the Sentencing Act 1991 (Vic) came into operation. The provisions applies only to specified offences, called ‘baseline offences’. These included murder and child sexual abuse offences. For baseline […]

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Bill introduced for crowd sourced equity funding in Australia

The aim of crowd sourced equity funding (CSEF) is to enable companies, particularly innovative start-ups, to raise comparatively small amounts of equity funding from a spread of investors, usually via an online platform, with less disclosure than would be required in a full prospectus. In a post in August this year, I noted that the […]

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More PPSA cases: Gelpack and Interlink

I have expanded my online digest of PPSA cases to include two recent decisions. Gelpack Enterprises Pty Ltd, Re [2015] NSWSC 1558 Gelpack is a case about authority needed to sign or agree to terms of a security agreement, and is also interesting because the court commented on the nature of the rights in collateral […]