Author Archives: Mark McKillop

PPSA – Recent Developments – the O’Keeffe and Psyche cases

I recently presented a paper to Leo Cussens during a half day PPSA conference on the topic recent developments in the PPSA.  A full copy of the paper can be found at this link: Leo Cussens – PPSA – 23.5.19

The PPSA is relatively new (for a law at least) and so the Courts are still working through the legislation as cases come before them.  Many recent cases consider relatively straight forward aspects of the legislation.

As such, they are not of great significance other than as a demonstration of principle.  In the matter of O’Keefe Heneghan Pty Ltd (in liq) & Ors (2018) NSWSC 1958 (O’Keefe) is one of those cases, considering the continuing super-priority of approved deposit taking institutions (ADI) (usually banks or non-bank financial institutions) under the Act.

One significant development has been repeated demonstration of the drastic consequences of failing to identify a grantor by its proper identification number, leading to a lot of decisions considering efforts to overcome such errors. The problem was identified to drastic effect for the secured creditor in OneSteel Manufacturing Pty Ltd (administrators appointed) (2017) NSWSC 21.

There has been a rash of subsequent cases grappling with the same issue from different angles, and the recent case of Psyche Holdings Pty Limited (2018) NSWSC 1254 (Psyche) is one of them.

In the matter of O’Keeffe Heneghan Pty Ltd (in liq) & Ors (2018) NSWSC 1958

Takeout:  An ADI has super priority over ADI Accounts under its control, even where it has failed to register its security interest, since it is able to perfect its security interest by control of the ADI account.  That follows since the account is held with it and is at all times the balance is under its direct control.  An ADI which has perfected by control is entitled to follow its security interest out of the account into the control of others without losing its priority.  Secured creditors who are not ADIs should be on notice  that their priority will virtually always be secondary when competing against an ADI which has perfected by control, even after registration of their secured interest.

In the matter of Psyche Holdings Pty Limited [2018] NSWSC 1254

Takeout:  It is very important to register a security interest in accordance with the requirements of the PPSA, particularly with regard to time limits and the form of application.  That is particularly so with regard to use of an ABN or ACN in appropriate cases.   If a security interest is not validly registered within time limits set by the PPSA, the secured party may lose priority or may lose the interest completely.  While the Court has a discretion to order an extension of time for registration, the ability of the Court to grant extensions is limited and uncertain.  Practitioners should not assume that an extension of time will be available on application to the court.

I also mentioned three other cases of some note.

G. Murch Nominees Pty Ltd v Paul David Annesley & Ors [2019] VSC 107: registration of baseless security interest by mortgagor after purchase of property from mortgagee:  steps taken to restrain further registrations and remove invalid registrations.

Rubis v Garrett as Trustee of the Andrew Garrett Family Trust Trading as Dynamic Commercial Workforce Solutions (No 2) [2018] FCA 2011 – Vexatious baseless registrations against 46 alleged grantors with whom registering party had no security relationship, including a Judge in separate proceedings. Whether Registrar had breached duty not to permit vexatious registrations to be registered, in circumstances where the Registrar knew vexatious history of lodging party.

Toll Energy and Marine Logistics Pty Ltd v Conlon Murphy Pty Ltd [2019] FCA 532: extension of time for registration of a PMSI under s588FM of the Corporations Act (not insolvent, no objections)

Caveats – A refresher

Over the past 6 months I have made several presentations to client law firms, and delivered a CPD session for Foleys List, on the basics of caveats.  The presentation lasts about 40 minutes and takes an overview of the subject, accompanied by a more detailed paper to be read afterward.

A copy is available here:  Caveats – Basics – Handout – WP

The presentation is aimed at practitioners who deal with caveats on an occasional basis but are not frequently involved with litigation regarding them.  The paper covers the following broad topics:

  • What is a caveat
  • Registrations systems as a medium for caveats
  • What is a caveatable interest?  Common examples of what is and is not.
  • Caveats as a statutory injunction
  • Why not just Register anyway?
  • Lodging a caveat
  • The time for registration
  • Removal – lapsing notices and applications to a Court






Cycling Tech – di2 shifting


After some years of scepticism I am a recent convert to electronic shifting.  My new bike came with the Ultegra 6870 Di2 group set

The best part about Di2 is that the gear changes are made electronically rather than manually.  Electric motors in the front and rear derailleurs do the shifting for you rather than shifting by manually pulling cables.  The cabling connection from the shifters to the derailleurs is purely to pass on power and the electric signals.

This means that each shift occurs with absolute precision and the gears require much less adjustment than manual gears do.  The system is powered by a battery and computer  that sits inside a junction box.  Connecting cables plug into that box and go into the front left and right shifters and also into the derailleurs at the front and rear of the system.  The whole thing is designed to be “plug and play” so all you have to do is connect the various parts to the junction box with Di2 cabling and the whole thing works.  No need for the hassle of adjusting cable tension etc.

The junction box is small enough to sit inside a seat post or a down tube so that it doesn’t have to sit mounted on the outside of the frame as earlier Di2 systems did.  It is still possible to fit the junction box to the outside of the frame as it is waterproof but it is much more aero if it can be shoved inside a seat post or a down tube.  Most bikes nowadays are designed to work with Di2 and even older bikes can be set up with a Di2 system by your local bike shop.

The cost of the system when buying a new bike is not that much greater than a mechanical group set.  It costs roughly an extra $500. The retail price of an Ultegra Di2 system is about AUD$2,000 but in reality you can buy them on-line for half that.  When looking around for a Di2 system when I bought my last bike six months ago you could buy a Di2 complete Ultegra system for about $900.  That is about the same price as a complete Durace mechanical system (not the new 9100).

So what’s it like to ride?  Well it’s fantastic.  The gear shifting is absolutely precise.  It’s quicker than a manual shift, the shift is instant. Unlike a manual system where you’ve got to throw the shifter lever a fair distance to make a shift and quite often the gears quickly get out of adjustment and the amount of pressure you have to apply changes, a Di2 system is always the same.  You just press the shifter, you click a button where the lever used to be and the shift occurs.

The battery life is really good.  In practice I found that I have never got close to having the battery running out of power.  I usually charge the battery once a week but if you read the literature Shimano claim the battery will last about 1800km on a single charge.  The exact battery life depends on how often you shift gears but I did read recently that a Shimano Di2 equipped bike in the Tour de France did the entire tour without a recharge of the battery without any problems.

The junction box has a light indicator on it to tell you how much charge is remaining.  It has a solid green light if the battery is 100-50% charged, a blinking green light if it is around 50%, a solid red light if it is around 25% and a blinking red light to indicate that it needs charging ASAP.  There are still 200 shifts available on the blinking red light and when the battery gets really low the front derailleur is disabled first so that there are still a couple of hundred shifts available on the rear cogs before the battery fails.

The only reason you should ever run out of battery on Di2 systems is if you neglect to charge it at all for months and you ignore the warning lights.

You can get an adaptor that allows the Di2 junction box to connect wirelessly with other devices via ANT+.  I have installed this.  It costs about $50 and it will talk to my Garmin bike computer and also my Garmin watch.  That allows the Garmin bike computer to give you a heap of data on the go.  This includes what gear you are in, your gear ratio (that is the mechanical advantage from front gear to the rear gear), the battery charge percentage, the number if shifts you have made on the front derailleur and the rear derailleur during the ride and a few other sort of useless bits of data that are entertaining to data nerds like me.

For example on a bunch ride to Mornington and back of ab

out 84km, I made eight shifts on the front derailleur for the whole ride and 844 shifts on the rear derailleur for the whole ride.  So that is 852 shifts over a three hour ride.  I’m not sure exactly what that means but that to me is pretty interesting that I would change gears 844 times in 180 minutes.

The newer Di2 systems in future will allow for more advanced gear shifting systems.  You can already program a Durace Di2 system to make combination gear shifts.  The same is available in the r8070 Ultegra system.  For example, press a function key and have the front derailleur change down and have the rear derailleur change three cogs up at the same time.  The technology allows for a semi-automatic or fully-automatic gear changing system that responds to the load that you put through the chain and select the appropriate gear.  You might imagine a system that automatically changes you down to the small ring on the front and drops you down a couple of gears on the back when you start climbing.  The current Di2 technology would work with that with some software adaption but future systems will do that straight out of the box.

A link to an automatic shifting system reviewed –



Stopping sham PPSR Registrations – again, and again

The PPSR is Ripe for abuse

One of the weaknesses of the Personal Property Security Register (PPSR) is that anyone can go online and lodge a registration for a few dollars in fees by claiming to hold a “security interest” in respect of the personal property of another, with very few immediate consequences.

The victim of the sham registration can suffer real prejudice:  searches of the register will show apparent security interests over the victim’s personal property.  The impression given can lead to delays in completing other transactions involving the giving of real security over the affected assets or other transactions involving them, whilst time and money is required to remove the registration.

Jurisdiction to Remove and Restrain Sham Registrations

In 2014 as Counsel for the plaintiff I appeared in Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd [2014] VSC 217 where the plaintiff obtained an interlocutory and then final injunction to restrain the repeated registration of a sham “security interest” on the PPSR on the basis that it was an abuse of process.    I published a blog post about the case here.

The case has since attracted some attention, being reported at (2014) 285 FLR 267.

It has now also been followed in Victoria as a precedent establishing the Court’s inherent jurisdiction to grant injunctive relief of the type and on certain other points, in National Australia Bank Ltd v Garrett [2016] FCA 714.

The facts in National are a great illustration of the ease of registration on the PPSR.

Mr Garrett had been a customer of the Bank through various entities he controlled in the wine industry.   It is apparent from reading the judgment that the relationship between bank and customer had deteriorated markedly over time.  It appears again from the judgment that Mr Garrett had been subject of at least one vexatious litigant order and there was a history of applications involving him and the bank.

A financing statement was registered by the “Trustee for The Andrew Garrett Family Trust No. 4” on 24 April 2016 on the PPSR claiming a security interest in respect of the property of NAB and Treasury Wine Estates Vintners Ltd.  The collateral was said to be “All present and after-acquired property – No exceptions”.

The basis of the registration appears to have been a purported charge of which NAB gained notice in these circumstances (at para 12 of the judgment):

The registration of the financing statement followed NAB’s receipt of an email from Mr Garrett on 24 April 2016 in which Mr Garrett stated that he intended to register a charge on the PPSR over NAB’s property. Attached to the 24 April 2016 email was a copy of a Security Deed (titled “Distributor License Purchase Vendor Finance Performance Security Deed”) which purported to be a charge granted by NAB in favour of OenoViva and Mr Garrett as trustee for the Andrew Garrett Family Trust ABN 78 761 760 976. The Security Deed relevantly stated that: “This Charge is registered pursuant to the undertaking as to loss costs and damage given by the Chargee in SCI-2004-127; Andrew Garrett Wines Resorts Pty Ltd & Anor v National Australia Bank Limited”. The Security Deed has not been signed or otherwise executed by NAB. It is a creation of Mr Garrett’s and built upon the misconceived foundation that an undertaking as to damages given in a prior proceeding could somehow give rise to a security interest; I will return to the undertaking later.

[emphasis added]

The Bank made application to remove the registration after Mr Garrett refused to remove it in response to an amendment demand, being the administrative process provided by section 178 of the PPSA.

Beach J followed and confirmed the broad finding of Robson J’s decision in Sandhurst to the effect that a security interest under the PPSA does not include an interest in property that is said to arise by operation of equity, including an equitable remedial  constructive trust or charge.  Accordingly it cannot be registered.  Specifically, Beach J found [see National at paragraphs 27 to 33]:

  1. A “security interest” under the PPSA is one that is provided for by a transaction where one is dealing with consensual arrangements.  A transaction therefore does not include a claim based on obtaining equitable relief from a court of equity, such as a remedial constructive trust or charge.
  2. In identifying the transaction one must look to the substance and not the form.
  3. Further, certain interests in personal property arising at law are specifically carved out of the definition of security interest by section 8(1)(c) of the PPSA.

Beach J also followed Robson J’s finding in relation to the Court’s inherent jurisdiction under s37 of the Supreme Court Act 1986 to restrain registration as an abuse of process. Robson J accepted that the circumstances were similar to those that existed in abuses of the caveat system, where the Court already had exercised its inherent jurisdiction to remove caveats legally placed but in an abusive manner [see Sandhurst paragraphs 108 to 118, National at  paragraph 50].

Procedural Points on Judicial Process under s182 of the PPSA

In Sandhurst it was unnecessary for the Court to consider the procedure under the PPSA for removing contested registrations.  In National Beach J gave some indications of procedural points that ought to be followed.

In order to remove the an erroneous registration an applicant gives an amendment demand to the secured party under s178(1) of the PPSA.  The demand can only be given where authorized under the section.  Making an amendment demand is authorized by the section where either all of the collateral referred to in the registration, or part of it, does not secure the claimed obligation.

Assuming the amendment demand  is refused, a judicial process established under s182 of the PPSA can be invoked  within 5 business days of giving the demand.  The process provides for a hearing to determine if the amendment demand is authorized.

Beach J made the following comments about that process:

  1. The Court should treat an application made to sustain a contested registration in a similar manner to the defence of a Caveat application;
  2. The onus is on the putative secured party (in this case Garrett) to satisfy the Court that its registration ought remain;
  3. Some caution needs to be exercised in comparing the procedures, since s182(4) of the Act requires the applicant (in this case the National) to discharge a legal onus to establish that the amendment demand that initiates the process is itself authorized under s178(1) by prima facie evidence.  So the applicant would need to satisfy the Court by prima facie evidence that part or some of the collateral did not secure the obligation claimed.  That requirement was met in this case.


Looking forward, I expect these sorts of applications to become quite common, owing to the ease of abuse.  it is probably unlikely that the process for lodging a registration on the PPSR will be changed much as it is intended to be an easy system to use.  It is a question of competing policy imperatives which will not be resolved without some thought by regulators and stakeholders.



A QUESTIONABLE PRACTICE: PPS vesting provisions on appointment do not extinguish a financier’s perfected interest in leased equipment on the PPSR.

I recently had a piece published in the ARITA Journal with the above, rather lengthy, title.

The topic is the extent to which a financier’s security interest is really affected by the vesting provision, section 267, in the PPSA.  There is a current practice of letters being dispatched to the holders of any unperfected security interests in leased equipment, claiming vesting of all interest in the collateral in issue, without regard to upstream financier’s interests. The fact is that there are good arguments that the financier’s interest is not affected, even if the owner of the equipment who has provided the lease may lose its interest because of vesting.

This article deals with such an example where the argument of the VA in that case was defeated by the citation of a Canadian case on point. The issue hasn’t been dealt with by the Courts in Australia yet so is topical, and is relevant to major banks and equipment fleet financiers who can be affected.

A link to a PDF copy appears below.

ARITA Journal March 2016 Mark McKillop


The Hell of the Alps – a barrister cycling the Peaks Challenge Falls Creek

On 13 March 2016 I woke at Falls Creek ready to take on one of Australia’s toughest single day bicycle rides, the Peaks Challenge Falls Creek, also known as the Three Peaks. Entrants are required to cover 235 km of road, climbing three peaks on the journey, in a time limit of 13 hours.

The profile of the ride shows the difficulty of this beast:

3 peaks_ right side page

I lined up with Andy Turner of Foleys List at the start, together with a couple of other cycling mates Stu, Jarrod and Sean.

I was particularly on edge, having entered the event last year and being forced to pull out out with just 23 km to go because of crippling leg cramps.

Over 1600 riders entered, and it begs the question, “WHY?”.  What attracts someone to put themselves through such a ringer?  The stats on the entrants are interesting.  95% of riders in this year’s ride were male, and almost exclusively the age of the riders was late 30s through to mid 50s.  In other words, a MAMIL rich environment, mid life crisis central.  Not unlike the legal profession some might say….  To the organizer’s credit, and I suspect to aid their coffers going forward, they have begun a push to attract more women to the event in future by staging  women only training rides.

There was a briefing for riders at 6pm on the Saturday night before the ride.  I have never seen a greater collection of expensive carbon cycling machines and high priced fashion lycra gear before.


After a week of forecasts threatening 35 mm of rain and thunderstorms, we were very lucky to get a clear day, with no rain or much wind to speak of, for the start before dawn at 6:45 am.  The ride opens with a fast descent from Falls Creek ski resort, to Mt Beauty township.

We were part of a torrent of 1600 riders plummeting into the dark doing speeds of up to 60 km/h, with only bike lights to guide us.  I saw at least one rider who had overcooked it and run off the road’s edge into the trees.  I think he was OK.  We took about 45 minutes to cover the 30 or so kms to the valley floor at an average speed of 44 km/h.

The first proper climb is Tawonga gap, relatively easy at only 476 m ascending but still 8 km long at a 6% gradient.  It took me 43 minutes to knock off. Andy was waiting at the top with another two of our crew, Stu and Jarrod.

We rode in a company of 4 through to the next climb, Mt Hotham, 30 km of climbing and a massive 1303 m ascending.  This took us each about 2 hours and twenty minutes.  Whilst the overall gradient is only 4%, it is split into a first 10km section that averages about 8%, a middle that is virtually flat (about 2%) and then a top 9km which is about 9%.  It has some very steep ramps of in excess of 14% in places.

This is a fantastic climb and if anyone is thinking of heading to the alps to ride, I highly recommend it.  The views are stupendous:  once you reach about the 8km mark you emerge from a twisty forest climb to ride around the rim of a vast natural bowl, which gets high enough that the trees disappear to give way to Alpine scrub.  You can see the sun light shine off the Hotham ski village windows 20 kms across the bowl, the peak of Mt Feathertop and spectacular views plunging off the either side of the road in places.  It was extra special on this ride because the sun was glinting off helmets and bikes all around 15 km or so of the road as it winds around the rim.

Once we cleared the summit of Hotham it was a fast descent to Dinner Plain for a lunch stop, and then a long descent, giving way to rolling hills at Omeo, to reach the last climb back to Falls Creek.  This climb starts about 10 km from a tiny hamlet called Anglers Rest.  By the time we got there, we’d covered 200 km and had already ascended more than 3400m in altitude.  We were pretty buggered.

This is where the event really starts.  You face 23 kms and 980 m vertical of climbing to reach the Alpine plateau at the back of Falls Creek ski resort. Trouble is you have likely spent all your energy just to get here. The first section of the climb starts at WTF corner (pictured).  You make a 180 degree turn into a blind corner only to face a wall of bitumen:  it is a “f#@$ng” steep start, hence the name – 500 m at about 14% gradient.

The climb then grinds on relentlessly, with almost no corners to provide relief, for 9 km at an average of 9% with sections getting up to 15%.  It is brutal.

Its here where my legs gave up last year, and yet again this year I had some cramping half way up which I was able to overcome with some walking and stretches. Among the field, it was absolute carnage.  The temperature was 30 degrees and humid, lots of riders got off and walked, I even saw one rider fall off flat to the road in exhaustion.  The “SAG” wagon was about to help, bus to ferry you home, picking up those who had thrown in the towel.

I finally reached the top of the climb after an epic 2 hours and 54 minutes of suffering. From the top of that climb its a further 12 km flattish ride to the finish.   If you’ve been there in winter, this is where the cross country trails around the dam are located and where the lifts over the back the resort face toward.   I finally got a head of steam up toward the top of the climb, and powered across the line in 12:56.09, with 3:51 to spare before the cut off applied.  Andy and the crew had pushed on from WTF corner and finished about an hour ahead of me in about 11 hours 56 minutes.  Sean finished in the elite “sub 10 hour” bracket.  The winner  by the way finished in something like 7 and a half hours.

A great event, we came away swearing never again, but I am already thinking I could do better if I just had an other go…

[This post was written for publication in the Foley’s List newsletter]

PPS Leases explained, what is Regularly Engaged in the Leasing of Goods and what is a PPSA Fixture?

The courts continue to hammer out the meaning of various basic provisions of the PPSA.

The decision in Forge Group Power Pty Limited (in liquidation)(receivers and managers appointed) v General Electric International Inc [2016] NSWSC 52 looked at two issues dealing with the reach of the PPSA to leases:

  •  What constitutes “regularly engaged in the business of leasing goods”
  • What is a fixture for these purposes?


 The Personal Property and Securities Act 2009 (Cth) (PPSA) introduced a new national code for determining the priorities of security interests in personal property., where primacy is given to registered interests.

Prior to the introduction of the PPSA, a owner of personal property, as a lessor, had all the common law rights of an ownership against the world, including to recover that property.  Those rights were largely subject only to the terms of any transactions the owner entered with third parties affecting those rights: for example, by leasing, charging, pledging, bailing or selling the goods.

However, under the PPSA, the rights of ownership under a goods lease are affected when they are registrable security interests.  A security interest arises where, in substance, an interest in personal property provided for by a transaction secures payment or performance of an obligation: section 12(1) of the PPSA.

Ownership interests under a Lease – the PPS Lease

Difficulties arise in relation to leases under registration schemes, because it is necessary for legislators to distinguish between leases that are in substance a financing arrangement which secure a payment or obligation (finance leases), and leases that are pure leases exacting payment only for use of the property before it is returned (operating leases). Examples of the former might include a long-term car lease, over a period of 3 years, with no residual or an agreed balloon payment. An example of the latter might include a 7 day car-hire for a daily fee, with the vehicle returned at the end of the hire.

There is a grey area between the two concepts, and room to argue whether a security interest arises or not, depending upon the term and financial structure of a lease.

Under the PPSA, the interest of a lessor under a lease will be registrable in several circumstances:

  •  First, where in substance, the lease is a finance lease that creates an interest in the property that secures payment or performance of an obligation, and so falls within the general definition of a security interest. For example, a finance lease: see section 12(2)(i) of the PPSA;
  • Second, where the lease is a “PPS Lease”, irrespective of whether the lease is a finance or operating lease, but falls within the definition of PPS Lease: see section 13 of the PPSA.

The principal effects of failing to register are:

  •  Where the lessee is bankrupted or enters into insolvent administration, an unregistered registrable security interest vests in the liquidator or trustee; and
  • priority is lost to holders of security interests in the property who are registered, for example a financing bank.

Generally speaking, a PPS Lease is a lease of goods that endures for a period of more than 12 months or is in respect of goods registrable by serial number:

  • It does not matter whether the lease is a finance or operating lease. Both are caught;
  • It includes leases where, by renewal or extension, the lease may or does continue for more than 12 months;
  • It includes a lease of goods that may or must be described by serial number (eg cars, aircraft and aircraft engines, watercraft, boats, certain intellectual property: section 13(1)).
  • If the lessor is not “regularly engaged in the business of leasing goods”, the lease is not a PPS Lease.
  • Further, if the property is a fixture, rather than personalty, the PPSA does not apply – see PPSA section 8(1)(j).

So why is it necessary to have PPS leases in the legislation? Why not just rely on the substance of the lease to determine whether it falls within section 12? There appear to be several reasons:

  • First, to eliminate the grey area between operating and finance leases, but to preserve from registration short term leases that are likely to be operating leases;
  • Second, to bring property identifiable by serial number completely within the registration scheme;
  • Third, the interest of a lessor under a PPS Lease is purchase money security interest for the purposes of the priority rules, and so takes priority over other secured creditors who are registered – see section 14(1)(c). It is notable that the interest of a lessor under a short term finance lease of less than 12 months is not a PMSI.

The Limits of Regularly Leasing and Fixtures

In Forge, General Electric International Inc (GE) had by an operating lease dated 5 March 2013 provided four gas turbine electrical generators to the plaintiff (Forge). On 11 February 2014, Forge went into liquidation. Prior to 22 October 2013, GE had operated a business in Australia of renting gas turbine power generation units. From that date, it sold the rental business and had assigned the benefit of the lease and the turbines. It also continued to supply replacement turbines on a temporary basis and free of charge, to its customers who required maintenance on turbines that GE had supplied.

GE argued that at the time of the liquidation it was no longer regularly in the business of leasing turbines. The submission was rejected, since:

  • the relevant date to assess that issue was at the date of lease, not the date of liquidation (at[136]) and a the date of the lease it had not sold its business;
  • in any event, after the sale, GE continued to provide turbines on a replacement basis in the market, albeit where maintenance required it (at[134]).

GE also argued the turbines were fixtures. Under section 10 of the PPSA a “fixture” means goods, other than crops, that are affixed to land. GE argued that the definition was a “bespoke” definition that differed from the common law.   That submission was also rejected and the court found that the concept of fixture in the PPSA was the same as at common law (at [77]).

The turbines were found not to be fixtures on the facts. The key points included that (at [134]):

  • The turbines were truly portable, in that they were designed to be quickly demobilized and moved to another site, and were on wheeled trailer beds for that purpose;
  • They could be removed without damage to the land;
  • The cost of removal was modest compared to the cost of the turbines;
  • The turbines were rented for a short period, being two years, with limited renewals and were clearly intended to be removed in the future;
  • GE retained ownership and the lease specified that the turbines were personal property;
  • Forge was obliged to return them at the end of the term;
  • Forge did not own the site where they were installed.




Court Injuncts Sham PPSR Registrations

Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd [2014] VSC 217


Initial registration of a financing statement on the PPSR is very easy.  You simply go to the Personal Property Securities Register (PPSR) website and follow the links, enter the prescribed data, pay a small fee and hit a button or two.

The ease of registration, compared to a paper based registry such as land titles or the former company charges register, makes the PPSR more open to abuse.

In Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd [2014] VSC 217 three companies had financing statements registered in respect of their personal property without basis.  The registrations were maintained, in the face of demands to remove them, as leverage to pursue a claim one of the defendants had against Sandhurst and others.  The claim was not to a security interest in respect of personal property, but rather a claim to some equitable interest in certain land.  Accordingly, the claim was not registrable:  see paragraphs  [87] to [107] of the judgment of Robson J.

The financing statements following the administrative “show cause” process under the Personal Property Securities Act 2009 (Cth).

That was not the end of the matter – in this case the defendants threatened to, and did, make more registrations to pursue their claim.  Each time a new financing  statement, or financing change statement, is registered, then the administrative process has to be repeated.  The administrative process is time consuming and expensive.  In the meantime, before it resolves, the existence of a record of sham financing statements can adversely affect the innocent party, especially with its own financiers and may amount to an event of default.

In Sandhurst the plaintiff companies successfully sought injunctions restraining further financing statements, or financing change statements, from being registered by the defendants.  The injunctions were obtained by the exercise of the Court’s inherent injunctive jurisdiction, rather than under any express power given to the Court by the PPSA:  see paragraphs [108] to [119].   The application is the first of its kind in Australia.

An application had also been made by the plaintiffs relying on s182 of the PPSA, but the Court did not need to deal with it.  However it is notable,and perhaps an unintended omission from the PPSA,  that the section does not contain an express power to enjoin registration of a financing statement, but does contain an express power to restrain the making of an amendment demand.

Further,  having established the absence of any security interest in the plaintiff companies’ personal property, the Court found that the substance of the defendants’ claims to an equitable interest to be irrelevant.  This meant that discovery in respect of those claims was not warranted, and that evidence and argument about those claims, except insofar as it was necessary to demonstrate the absence of a security interest, was not permitted.   The finding prevented the disocvery process in the application itself from being used in an abusive manner.   See paragraphs [120] to [121].

The author appeared as Counsel in the proceeding for the plaintiffs, instructed by Minter Ellison.  Nick Anson, Partner and Jane Salveson, Special Counsel have prepared an interesting alert regarding this case and particularly the problems arising out of Sham registrations, which can be found here.



When is a defect in a PPSR registration fatal? A defect in the ACN of the secured party not misleading

Case Note – Future Revelation Ltd v Medica Radiology & Nuclear Medicine Pty Ltd [2013] NSWSC 1741

It is often the case that an error is made in the ACN, ABN or even name of a party, or in the serial number of collateral,  when registering on the PPSR.  The online nature of the registration process lends itself to typos or transcription errors.

The Supreme Court of NSW has found that a defect in the ACN of the secured party in a financing statement registered on the PPSR does not render the registration ineffective.

Section 153 of the  Personal Property Securities Act 2010 (“PPSA”) requires that a financing statement include certain details of the secured party.  If the secured party is a Body Corporate, the ACN must be entered – see item 2 in the table under para 1.3(4) in schedule 1 of the PPSR regulations.

In Future Revelations, the secured party’s ABN number was entered instead of its ACN number.

The PPSA codifies which defect in the register make the associated registration is ineffective.  It is important in practice to be aware of them:

  • Section 164 provides that a defect in the register will render the relevant security interest ineffective if it is “seriously misleading”, excepting defects prescribed in the regulations, or it if is defect mentioned in section 165.
  • The defects in section 165 are:
    • defects preventing disclosure of the registration by searching the serial number of the collateral where that detail is required for registration.  An example would be omission of the serial number or an error in it;
    • where the serial number is not required, where a search by reference to the grantor’s details is not capable of disclosing the registration.  An example might be an error in the name of the grantor, such as recording the name of a partnership as that of an individual partner, rather than that of the partnership;
    • where the registration is said to be in respect of a PMSI, but in fact is not;
    • otherwise as specified in the regulations.
  • At present no regulations have been made under sections 164 or 165.

What makes a registration defect “seriously misleading”?  Since the PPSR is a register designed to enable the public to identify security interests in collateral, or security interests given by a grantor, errors are seriously misleading if they  hinder or prevent a search turning up security interests by reference to the identifying details of the collateral or grantor.

In Future Revelations, Brereton J said at [5] to [7]:

  1. The suggested defect in this case is not one of a kind mentioned in s 165. The question then is whether it is “seriously misleading”. That term is not defined in the PPSA, nor is there any guidance in respect of its meaning in the explanatory memorandum or the second reading speech. However, as is well-known, the PPSA is modelled on and derived from similar legislation in Canada and New Zealand and, as was observed in Maiden Civil (P&E) Pty Ltd v Queensland Excavation Services Pty Ltd [2013] NSWSC 852, the Commonwealth Parliament in enacting legislation that was modelled on the New Zealand and Canadian legislation should be taken to have intended approaches and interpretations applied by the Courts of those countries to their legislation to apply in Australia. A similar view has been taken in New Zealand.
  1. Canadian case law suggests that the test for whether a defect is “seriously misleading” is whether it will result in the registration not being disclosed on a search [see Re Lambert (1994) 7 PPSAC (2d); GMAC Leaseco Ltd v Moncton Motor Home & Sales (2003) 227 DLR (4th) 154 at [58]]. That makes sense, as the purpose of registration is to enable the existence of the security interest in the collateral to be searched and ascertained. A person searching in the PPSR is likely to be concerned with the identity of the grantor and/or the collateral. In terms of searching the PPSR, while there is facility to search by reference to the identity of the grantor and the collateral, there is no facility to search by reference to the identity of the secured party.
  1. In the present case, a search by reference to the identity of the collateral or the grantor would have disclosed the relevant security interest. Such a search would have identified clearly enough the secured party, namely Suncorp, even though its ABN and not ACN was stated. In my view, it is very clear that this defect was not seriously misleading or indeed for that matter misleading at all. Accordingly, it seems to me by operation of s 164(1) that the registration is not ineffective by reason of the defect that has been identified.

So errors in the details of the secured party will be not be fatal, provided the details in the registration in respect of the serial number of the collateral, or the grantor, as the case may be, is correct.

However, an error in the ACN or name of a grantor, where the serial number of the collateral was not required, may well be fatal – see for example a case where the name of the grantor was recorded as “Grandstand” rather than “Granstrand”.

Practitioners need to be careful in checking transcription of the identifying details of the grantor and the collateral (particularly the serial number) when entering details on the PPSR website.

It is also worth noting that the application in Future Revelations was made urgently and  ex parte, without formally filing process.  The application was urgent since the borrower had just defaulted.  Leave was granted to file process in Court, and an order was made giving liberty to apply to any administrator, liquidator or unsecured creditor to claim their interests could be affected by the order of the Court.




What a difference a day makes – When does the relation back period start?

Re Weston Application; Employers Mutual Indemnity (Workers Compensation) Ltd v Omni Corporation Pty Ltd [2009] NSWSC 264

In insolvency law the calculation of precise periods of time is important.  Insolvency practitioners need to know exactly when limitation periods end in order to preserve potential claims.  The “relation back period” is one of the more important time periods relevant to calculating limitations, and yet there is surprisingly little authority on exactly when the relation back period starts.

The Relation Back period

Most practitioners are familiar with what is the last day of a relation back period. It is the “relation-back day” in corporate law, and in bankruptcy it is the date of the presentation of the petition against the bankrupt.

But what is the first day of the relation-back period?  If the relation back day is 12 December, is a 6 month relation-back period taken to begin on the 12 June?  Or 13 June?  The answer has obvious practical significance because it is not uncommon for a significant payment to fall on the 12th day.

The issue is whether one includes the relation back day or not in the 6 month period. Surprisingly, there is no appellate decision which makes the answer clear, however single judge authorities indicate one does count the relation-back day. So in the example, 12 June would not be included.

In Scott v The Commissioner of Taxation [2003] VSC 50 (link),  Justice Dodds-Streeton reached the same conclusion (at paragraphs 32 and 33).  However the decision does include reasoning on that point.

In Re Weston Application; Employers Mutual Indemnity (Workers Compensation) Ltd v Omni Corporation Pty Ltd[2009] NSWSC 264 (link), calculation of time going forward from the relation-back day was discussed in an application to strike out a voidable transaction claim on the basis it was out of time.  The time for making the application expires 3 years after the relation back day, or 12 months after the appointment of the liquidator, whichever is the later: s588FF(3)(a).

In Re Weston the liquidator commenced the application for relief under s588FF(1) exactly 3 years to the date after the relation back day:  the respective dates were 16 January 2009 and 16 January 2006.

Justice Barrett considered the issue relying on two statutory provisions (at paragraphs 6 to 16):

1.Section 105 of the Corporations Act. It provides:

Calculation of time

Without limiting subsection 36(1) of the Acts Interpretation Act 1901 , in calculating how many days a particular day, act or event is before or after another day, act or event, the first-mentioned day, or the day of the first-mentioned act or event, is to be counted but not the other day, or the day of the other act or event.

2.Section 36(1) of the Acts Interpretation Act 1901 (link).  It contains a useful table for calculating when a day should and should not be included in a time calculation.  The section states that:

A period of time referred to in an Act that is of a kind mentioned in [the table] is to be calculated according to the rule mentioned in [the table].

Based on those provisions, His Honour concluded:

  1. when a time period is expressed to end at, on or within a specified day, the period of time includes that day (item 4 of the table);
  2. when a time period is expressed to begin from a specified day, the period of time does not include that day (item 5 of the table).

The Start Date and the End Date

In Re Weston the result was that the liquidator had made his application in time, since the 16th of January 2006 was not included in calculating the 3 year limitation period after the relation-back day (applying item 5 from the table).

In calculating the start of the relation-back period, using the example above, 12 June would not be included, because 12 December would be included in the 6 month relation-back period (applying item 4 from the table).

Significance for Practitioners

The application of these principles is important:

  • for practitioners in diarising limitation periods;
  • identifying transactions at the extremes of the relation back periods under the voidable transaction provisions;
  • for third parties considering limitation defences;

for calculating the application of time periods generally where limits are strict. For an example, applied to determining whether an application was within time to set aside a statutory demand, see Autumn Solar Installations Pty Ltd v Solar Magic Australia Pty Ltd [2010] NSWSC 463.



Acknowledgement:  this post originally appeared on the Commercial Bar Association of Victoria blog, Commbar matters, at

A tale of a brief in 29 parts – tips for junior lawyers briefing counsel in the email age

When I started as an articled clerk in the early 90s, one of the senior partners at my firm gave me a copy of a paper, which I have now unfortunately lost, on how to best prepare a brief.

I think of that paper from time to time because preparation of a brief is a skill which, in the age of email, is “evolving”, to put it diplomatically.

Last year I was fortunate enough to receive some instructions, via email, for a matter which kept me occupied for a good three or four days. Unfortunately for the client, at least half a day of that time was spent reading, printing, organising and collating the twenty-nine emails and 90 or so attachments of which the brief consisted.

 Why does the quality of a brief matter?

A barrister is briefed for specialist advocacy skills or for advice, or both. Both advocacy and the giving of advice involve the communication of ideas in a clear and simple form.

An advocate uses those ideas to persuade, whilst counsel preparing an advice uses them to inform and advise. In both cases the barrister must master the relevant facts and issues before forming and presenting the ideas. The material needed to achieve that mastery is in the brief.

A barrister can be much more effective, more quickly, if the brief is a reasonably comprehensive, well organised and a well summarised extract from the solicitor’s file.

As a bonus from a cost perspective, a good brief can both reduce the amount of preparation work required by Counsel.

 Ten Tips in the Age of Email

As best as I can recall, the gist of that lost paper (with a few updates for modernity) was as follows:

1. Provide a hard copy of the brief to counsel. Even if urgency requires documents to be emailed to counsel immediately, always make sure that a complete hard copy brief is provided as soon as possible. It saves a lot of time in printing and collating materials that could otherwise be spent working on the matter briefed.

2. Feel free, if a matter is urgent, to email copy of the key documents from the brief. For example, the memorandum to counsel, a copy of the index to the brief, plus a copy of the handful of key documents that can get counsel started. By this I would mean no more than perhaps 2 or 3 documents at most. So if the case has already been issued, that might mean the statement of claim and the defence.

3. The memorandum to counsel is a great opportunity to tell counsel what the case is about and your views on it. Usually by the time counsel is briefed, a solicitor acting in the matter has built up a very valuable store of information and opinion about the case, the issues and witnesses. It is great practice to provide that information to counsel in the memorandum. Give a summary of the relevant facts, identify the relevant parties, identify the relevant causes of action and defences, and of most value, give your own view of the merits of the case. For the same reason, it is good practice to give a copy of advices that have been given to the client by the solicitor about the matter, plus any file notes from the solicitor’s file that are relevant, for example memorandums concerning the characteristics of witnesses.

4. Counsel should be informed of any discussions that have taken place to try to resolve a matter. If a matter has reached the point where counsel has been briefed where there had been no commercial discussions to try and resolve the matter, that would be very surprising. If that were the case, there should be an explanation as to why that is the case.

5. Ideally, briefs should be provided to counsel sooner rather than later. The reason is that once counsel has had an opportunity to review the brief, counsel may be of the view that the proposed course that the client wants to take is not advisable. For example, if the brief is to make an application to Court on an interlocutory matter, it may be that the interlocutory application is in counsel’s view unlikely to succeed, and not worth issuing. If counsel is briefed before the application is issued, the potential cost of withdrawing the application, or the cost of proceeding and failing, can be avoided.

6. As far as the contents of the brief are concerned, it very much depends upon what the purpose of the brief is. But for example, for a trial one would expect to receive:

– The current version of the pleadings.

– The relevant trial directions

– The parts of the discovery that will be relevant.

– Any expert reports.

– Any recent relevant correspondence between the solicitors.

– Witness statements, or draft proofs taken from witnesses.

– Copies of any advices given by previous counsel or by the solicitor to the client where relevant.

– Any memoranda prepared by the solicitor in-house on questions of law that are relevant to the proceeding.

– Copies of any legal authorities, including legislation or cases relevant to the brief.

– Any correspondence regarding settlement.

7. The index to the brief should be set out in a logical manner. There is no hard and fast rule for how the index should be organised, as long as it makes some sense.

8. As a general rule counsel should never be provided with original documents. They should be kept by the solicitor at all times. This applies to not only Court documents but also to discovered documents.

9. Where photographs are provided, or reports include coloured diagrams, it is very helpful to have colour copies of those that are clearly legible. There is nothing worse than working with grainy, difficult to recognise, black and white copies of photographs or diagrams from reports.

10. Keep a copy of the brief on your file, and for long running matters, periodically update counsel’s brief by refreshing the index and taking out materials that are no longer needed – eg, material relating to an application that is complete.

11. [At the very helpful suggestion of Dominique Hogan-Doran, whose blog can be found here:]  Prepare a chronology of key facts for the brief.  The best form of the chronology is not set in stone, and depends on the stage of the matter, but my preference is to include the date of the event, the relevant source document(s), where the event is pleaded, and any comments of the instructor on the significance of the event.


In concluding, perhaps one of the biggest benefits of a good brief is that it exploits human laziness! Barristers are, by human nature, more likely to pick up a well organised brief over a poorly or unorganised brief and start work on it. The response time from counsel is likely to be a lot quicker.