Author Archives: Mark McKillop

Exposure Draft of the Covid Insolvency Reforms released – just five more days (including this weekend) to make submissions….

I would not ordinarily post a link to something I had not read, but this is a pandemic! The Commonwealth announced its proposed insolvency law reforms just 2 weeks ago and has now released an exposure draft of the amending legislation together with an explanatory memorandum.

Submissions on the draft are due on Monday, 12 October 2020!!! So get cracking! This makes the road runner look slow.

I will make some further comments in the next day or so once i have read it.

Debtor in Possession – Thoughts on Frydenburg’s Insolvency Law reform to commence 1 January 2021

The outline of the Federal Government’s small business insolvency reform package, to introduce a debtor in possession model for incorporated businesses with less than $1 m in debt, have been covered elsewhere. This package was announced just after 4pm yesterday.  A copy of the Treasurer’s media release can be found here.  The lease also includes a link to a “Insolvency Reforms Fact Sheet” here.  A useful summary of the proposed changes, by my colleague at the Victorian Bar, Carrie Rome-Sievers, can be found here.

Some thoughts that immediately spring to mind, from a PPSA perspective and generally follow.

Is the appointment of a “Small business restructuring practitioner” (SBRP) also going to trigger vesting under section 267 of the PPSA?  Or will vesting not occur if and until an administration or liquidation occurs. A security interest which is unperfected vests in corporations which are wound up or enter into a voluntary administration or DOCA (s267(1)).  The underlying policy principle behind vesting is to aid unsecured creditors in the insolvent administration left unaware of the unperfected security interest.

Josh and Scomo

Presumably voidable transactions will continue to be recoverable only in liquidation.  When will the relation back period commence for a subsequent liquidation?  Will it be from the appointment of the SBRP, or will it be the date on which the voluntary administration is taken to commence?  If it is the latter, the appointment of a SBRP will be a tool that can be used to manipulate the relation back period to protect voidable transactions. See the discussion in my article on this issue, relating to the manipulation of the  relation back period by VA appointments.

The proposal requires all employee entitlements to be paid before a SBRP can be appointed. What entitlements? Arrears of wages and superannuation? What about unpaid accrued leave entitlements? Presumably contingent claims like amounts due on retrenchment are not included. Are such payments protected from preference claims in future liquidation?

Whilst the debtor is in possession, the business continues to trade for 20 business days whilst devising a turnaround plan.  What is the status of debts incurred in this period?  Is the owner/director personally liable, because the SBRP is not.  This seems to be a serious flaw compared to the personal liability of administrators in the same position.  It would seem to me that trade creditors would be reluctant to extend any credit once a SBRP was appointed without some security.

The new regime is set to apply from 1 January 2021, yet as others have noted today, there has been little or no industry consultation with respect to devising the proposal.  Presumably that will follow in coming months, however the process of baking the pie seems somewhat arse end around (apology for the mixed metaphor).

The regime includes a transitional period from 1 January 2021 to 31 March 2020, anticipating that there will not be enough trained SBRPs to meet the demand at the start. In this period businesses will be able to declare an intention to access the new process and thereby extend statutory demand and insolvent trading relief for the same period, as long as they appoint someone before 31 March. It seems to me the transition will introduce an added layer of uncertainty. I would imagine many business owners will choose the transition option to buy another 3 months of trading time.

It has been suggested, but I have not verified, that the proposal is a lift from a similar reform brought into law in the UK in June. See the attached link to a summary of the Corporate Insolvency and Governance Act 2020) (UK) prepared by Norton Rose Fulbright. It certainly looks very similar. That may explain how this proposal has been put together inside Treasury without much external input.

SBRPs appear to be paid a fee bargained with the debtor as a percentage of the “disbursements under the plan”, presumably a percentage of the payments made to creditors. What happens if the SBRP is not content with the fee offered?

The process is said to be available only to incorporated businesses.  Sole traders are not mentioned.  Yet sole traders make up a sizeable proportion of small businesses in Australia.  Are parallel changes going to be made in bankruptcy? Part X arrangements going to be harmonized for example?

Only incorporated businesses with liabilities less than $1 million can use the process.  How is the debt under the cap calculated?  Is it limited to actual debts of that amount, or are contingent debts included?  Will uncrystallised claims count, say under a premises lease or equipment lease?  What about liquidated damages  or penalties accruing in default under operational contracts, such as in construction?

The role of SBRP can be filled by persons other than a registered liquidator:  who in practice is going to take on the role other than registered liquidators?  Remembering that at law, if not in practice, voluntary administrators are not limited to registered liquidators, yet the latter are nearly always used.

Interesting times ahead.

   

PPSA Mid Year Update

I delivered a case law update to the Leo Cussens PPSA Half Day Seminar on Thursday morning, along with some excellent other presenters. One of the cases considered is Dalian Huarui Heavy Industry International Company Ltd v Clyde & Co Australia [2020] WASC 132, a case involving an iron ore project in WA and security interests in funds paid into trust pending an arbitration over construction work. A copy of the paper is at the link.

The Dalian decision is particularly important for solicitors acting for judgment or arbitration creditors who obtain security for their claim prior to trial. The WA Supreme Court recognised that security lodged with a trustee (eg a solicitor acting for a party) by agreement will constitute a security interest for PPSa purposes. In this case Dalian failed to register but, through fortunate circumstances of the case, had become seized of full beneficial ownership of the security amount before the appointment of a liquidator. A happy $27 million piece of luck.

leo cussens – ppsa – 17.9.20

COVID PPSA Update

On 23 June 2020, here in Melbourne, in the calm between the lockdowns (which seems like an eternity ago now) I delivered an update to lawyers on COVID implications for the operation of the PPSA to the Leo Cussens Institute via Zoom. A copy of the paper presented is attached at this link.

The key takeaways were:

  1. as a practitioner, know the basics: what is a security interest, why to register and how to register
  2. make sure that clients take steps to protect themselves from simple mistakes;
  3. in an environment where a pandemic of insolvency is a real risk, errors in dealing with the PPSA will be costlier than ever.

I suggested the minimum basics that a practitioner should know were:

  • The main impact of the PPSA is difficult times is in insolvency.  The first thing a liquidator, administrator or bankruptcy trustee will do when appointed is search the PPSR for relevant registrations.
  • In most appointments of liquidators or bankruptcy trustees, unsecured creditors will either receive nothing or very few cents in the dollar.  Therefore, if you propose to offer funds or goods to a person or entity on credit, considering security for the obligation should be the first thing at front of mind.
  • A first-ranking secured party can then generally choose whether to enforce their security and take the property or get priority of payment from the sale of the property.
  • To take security over personal property, clients will need two things:
  1. a security agreement that is well drafted:  usually within the terms of trade, or in a separate document; and
  2. to register that security on the PPSR.

Enjoy!

PPSA Update – February 2020 Paper

In February 2020 I delivered a now annual seminar providing an update on recent PPSA developments at the Leo Cussen Institute. The seminar covered three interesting recent cases:

Bluewaters Power 1 Pty Ltd v The Griffin Coal Mining Company Pty Ltd
[2019] WASC 438 (Bluewaters)

BMW Australia Finance Limited v @Civic Park Medical Centre Pty Ltd as trustee for @Civic Park Medical Centre Unit Trust [2019] FCA 999 (Civic Park)

In the matter of Beechworth Land Estates Pty Ltd (admins apptd) and Griffith Estates Pty Ltd (admins apptd); Cussen and of Beechworth Land Estates Pty Ltd v Douglas Estate Holdings Pty Ltd and Others [2019] NSWSC 1129 (Beechworth)

Topics covered in the seminar included:

  • the breadth of a “security interest”:  do step-in rights require registration on the PPSR?  The decision in Bluewaters;
  • PMSIs – traps where the debtor is the trustee of a trust:  extension of time to register in the decision in Civic Park;
  • Administrators’ Lien over interests in land and proceeds of its sale: the decision in Beechworth;
  • Inventory security:  issues of priority and vesting in relation to processing raw materials

A copy of the paper is attached at the following link:

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

Regards

Mark

 

 

 

Cycling Tech – di2 shifting

Di2action

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 –

https://www.dcrainmaker.com/2014/10/bioshifts-automated-shifting.html

Cheers

Mark

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.

Conclusions

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.

DSC_0765-COLLAGE

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]