This is the second of a series of articles that will examine the impact of the Personal Property Securities Act 2009 on specific business sectors. In this article Corporate Lawyer, Llon Riley deals with the impact of the PPSA on leasing or hiring equipment.
On 2 May 2017, the Supreme Court of New South Wales handed down its decision refusing an application to extend time to register a security interest in Production Printing (Aust) Pty Ltd (in liquidation)[2017] NSWSC 505.
The importance of security holders accurately registering their interest on the Personal Property Securities Register (PPSR) to create a valid, enforceable interest is constantly emphasised in commentary and cases. It is accepted that an error in a grantor’s identifier is likely to be fatal to a PPSR registration1, often resulting in a creditor’s unperfected interest vesting in a company upon it entering administration or liquidation. However, a recent decision of the New South Wales Supreme Court illustrates that a defective registration may be cured without losing priority.
Central Cleaning Supplies (Aust) Pty Ltd v Elkerton [2014] VSC 61.
Appeal from liquidators’ decision to reject claim for the return of cleaning equipment subject to retention of title. Consideration of retention of title clauses and the application of the transitional security agreements under Personal Property Securities Act 2009 (Cth).
Burns & Agnew v Commissioner of the Inland Revenue and Strategic Finance Limited (in rec) concerned a dispute between a secured creditor and the IRD (as a preferential creditor) in respect of certain funds received by the liquidators of Takapuna Procurement Limited (TPL). The liquidators applied to the High Court for directions as to the application of those funds and this required the Court to undertake an analysis of the concept of an "account receivable" for the purposes of determining whether such funds could be applied to satisfy preferential claims under the Seventh
A lien is the right to hold on to goods, and in some cases sell them, in order to ensure payment. Often the debt will be connected with services related to the goods.
A lien can be obtained by contract, or in certain specific situations the law creates it automatically. The difference can be significant.
Under the Personal Property Securities Act (PPSA), the holder of a common law or statutory lien may in some cases have special priority over a company’s secured creditors.
Types of lien
Findings last week of criminal liability in the Nathans Finance case echo the Centro ruling from the Australian Federal Court last month and make it clear that directors must apply their own judgement in the exercise of their duties rather than simply relying on management and expert advice.
The Gibson & Stiassny v StockCo & Ors litigation in relation to the Crafar receivership has clarified important aspects of the Personal Property Securities Act 1999 (PPSA).
The procedures seem obvious in the abstract but, as the case demonstrates, can be less obvious on the ground:
It is not uncommon for a receiver, liquidator or competing creditor to be presented with a security agreement, the ink on which appears scarcely to be dry.
If that secured creditor registered on the Personal Property Securities Register (PPSR) months or years earlier, does that registration date determine priority between competing security interests? Or is that unfair to other creditors?
In the recent decision of Frank v. Farlie, Turner & Co., LLC, 2011 ONSC 5519, Mr. Justice Perell of the Ontario Superior Court of Justice found, among other things, that punitive damages are not available under Part XXIII.1 of the Ontario Securities Act as such damages are inconsistent with the scheme and purpose of Ontario’s statutory secondary market disclosure liability regime. In so doing, the court confirmed the fundamental importance of liability limits in continuous disclosure claims against directors and officers.