We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Secured creditors at risk from vague registrations
Carson, in the matter of Hastie Group Limited
(no.3) [2012] FCA 719 / (2012) APPSR.
After the collapse of the Hastie Group (the Company), the
appointed administrator encountered significant difficulty in
identifying and matching the plant and equipment assets of the
Company to the secured parties listed in the 995 registrations on
the Personal Property Securities Register (PPSR).
The court held that the administrators were justified in selling
the unclaimed plant and equipment, which amounted to approximately
77% of the plant and equipment in the Company's possession, and
distributing the proceeds in the ordinary course of the
administration as result of the vagueness of many of the
registrations made by some of the secured creditors.
One of the main aims in implementing the Personal Property
Securities Act 2009 (PPSA) and establishing the PPSR was to
create transparency with respect to the apparent wealth of a
company that holds assets which are the subject of lease or finance
arrangements. However, this case demonstrated two significant
problems:
even though there were numerous registrations, which appear to
have related to the plant and equipment in the Company's
possession, the administrators were not able to identify the
particular assets linked to the registrations
where a claim was made, the secured parties failed to
appropriately identify the asset to which their registered interest
related.
The court made particular note of the generality of the PPSR
registrations and the difficulty the administrators encountered in
identifying the property the subject of the registered interests
despite taking a number of steps including, writing to the secured
parties and publishing notices in newspapers.
This highlights the need for secured parties to:
ensure that where possible and commercially appropriate, their
registrations specifically identify the goods that are the subject
of their registration
have systems to respond promptly and accurately to enquiries by
administrators so that their registered interests can be
acknowledged and supported by the administrator.
Middletons' Banking, Insolvency and Disputes team has
expertise in advising secured parties and administrators and can
assist with:
ensuring that your registrations are effective
responding to and preparing appropriate notices from
administrators.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Middletons has been awarded a 2012 EOWA Employer of Choice for
Women citation acknowledging our commitment to workplace
diversity.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
