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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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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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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 […]

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PPSA simplification: short term leases under one year

An amendment to the PPSA, dealing with short term leases, will commence soon. Generally, leases of serial numbered goods (motor vehicles, aircraft, watercraft) will no longer require registration if the term is a year or less, replacing the former 90 day rule for these kinds of goods. But there are traps for the unwary, particularly […]

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PPS case: Davidson v Registrar of Personal Property Securities

If you want a registration against you removed from the PPS register, and you give an amendment demand but the secured party will not remove it, you can apply to the Registrar (the ‘administrative process’) or a court (the ‘judicial process’) to have it removed. A recent decision by the AAT comments on the different […]

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PPSA case: Photios v Cussen

It’s an interesting question whether the Personal Property Security Act, in defining ‘security interest’, is creating a new species of property, or whether the term is simply used to describe a range of traditional security and other interests A comment by Robb J in the NSW Supreme Court decision Photios v Cussen [2015] NSWSC 336 comes down […]

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PPSA appeal succeeds: Central Cleaning Supplies v Elkerton

This case is about the common situation where supplies are made on retention of title (ROT) terms, and the contracts consist of an initial master agreement plus subsequent separate contracts for each supply.  The ROT is a security interest, and a PPSA registration is required.  But if the master agreement was made before the PPSA […]