Failing to register a lessor’s security interest on the PPSR over plant and equipment at leased premises can result in the lessor’s unperfected security interest passing to the administrator of the lessee.
In the recent decision of Flown Pty Ltd v Goldrange Pty Ltd [2016] WASC 419, a lessee’s administrator successfully retained ownership of plant and equipment (which were not fixtures) in the leased premises.
Background
Year in Review - Australia Law in 2016
Two’s company when it comes to debt funding. Surely, three makes things a little crowded? It doesn’t have to be that way.
Welcome to the first edition of the Herbert Smith Freehills Guide to Restructuring, Turnaround and Insolvency, Asia Pacific .
The High Court of Australia has now had the final say in the ongoing saga of the restaurant tenant who leased premises at Crown and was told that if it carried out high quality refurbishments of the premises, then it would be ‘looked after at renewal time’. When it came to the expiry of the term of the lease, the landlord required the tenant to vacate the premises.
Legal principles
A problem often faced by creditors is how to recover unsecured judgment debts. If a debtor owns real property, there is a mechanism available through the Courts to have the debt registered against the property and the sheriff's office sell the property to satisfy the judgment debt.
Snapshot
The New South Wales Supreme Court case of Forge Group Power Limited (in liquidation) (receivers and managers appointed) v General Electric International Inc [2016] NSWSC 52 provides guidance on the following issues in relation to the Personal Property Securities Act 2009 (Cth) (the PPSR):
When pursuing outstanding owners corporation fees, suing the right person or entity at the right time is critical.
If you get this wrong, you will not recover any money.
So, who is the owner?
Section 3 of Owners Corporations Act 2006 and the Subdivision Act 1988 state:
“an owner is a person who has an estate in fee simple in the land (except a mortgagee), or is empowered by or under an Act to convey an estate in fee simple in the land in an identified folio under the Transfer of Land Act 1958.”
With the number of companies entering external administration on the rise and the crucial post-Christmas retail trading period nearing an end, it is important for owners to ensure that they fully understand what rights they have to terminate a lease and recover unpaid rent if a tenant goes into external administration and its creditors then vote to enter into a Deed of Company Arrangement (DOCA).
If a tenant is in arrears and a DOCA is in place, can an owner exercise its contractual right to terminate the lease?