A recent decision of the Federal Court highlights the need for
creditors to actively enforce their security interests.
As a result of the decision, creditors should:
ensure they have precise details of personal property subject
to their security interest
be specific when describing property on the PPS Register
have systems that track the location of property
consider putting name plates on property that is on hire.
The case is Carson, in the matter of Hastie Group Limited
(No 3)  FCA 719 (5 July 2012). The Hastie Group
consisted of 44 companies holding plant and equipment across 36
The Hastie Group failed to maintain adequate records of their
assets and on entering into administration, the administrators
discovered 995 registrations against the company on the Personal
Property Securities Register (PPS Register).
The administrators wrote to the creditors at least once (and
wrote multiple letters to some creditors), advertised in The
Australian and sent more than 3,000 emails.
After all their efforts, 77% of the plant and equipment still
The administrators applied to the Court for directions allowing
them to sell the assets and apply the sale proceeds to the
administration in accordance with section 447D of the
Justice Yates acknowledged that there had been considerable
difficulties for the administrators. He recognised that the
administrators had endeavoured to identify claims as best they
could and permitted the administrators to dispose of the plant and
equipment as proposed.
Implications of the decision
If creditors do not take steps to pursue their security
interests, they risk losing some rights under the Personal
Property Securities Act and the money and time spent on
registering on the PPS Register is effectively wasted.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This Update highlights two recent cases that considered circumstances where liens could take priority over a registered security interest.
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