Australia: NSW Court of Appeal clarifies the meaning of fixtures under the PPSA – Financiers take note

Last Updated: 27 February 2017
Article by David Murray-Nobbs

The Personal Property Securities Act 2009 (Cth) (PPSA) does not regulate interests in land or fixtures, which are traditionally regarded as forming part of the land. The practical difficulty that arises is determining when goods brought onto land become fixtures and, as a consequence, whether the interests in those goods are regulated by a regime other than the PPSA.

In the recent case of Power Rental Op Co Australia, LLC - v- Forge Group Power Pty Limited (in liquidation) (receivers and managers appointed), Power Rental Op Co Australia, LLC (Power Rental) argued that there is a difference between what constitutes a fixture for the purposes of the PPSA and what constitutes a fixture for the purposes of the common law.

Power Rental's purpose in raising the argument was designed to overcome the initial finding of the New South Wales Supreme Court that Power Rental's security interest in several mobile gas turbines, which were leased to Forge Group Power Pty Limited (in liquidation) (receivers and managers appointed) (Forge), had vested in Forge after Forge went into administration as a result of the security interest not having been perfected by the registration of a financing statement on the Personal Property Securities Register (PPSR).

The New South Wales Court of Appeal disagreed with Power Rental's arguments and concluded that:

  1. there is no distinction between what constitutes a 'fixture' for the purposes of the PPSA and at common law; and
  2. the test for determining whether property is a 'fixture' for the purposes of the PPSA is the same as the test at common law.

In our opinion, the decision is unsurprising but does provide judicial confirmation of what was a commonly held understanding.

Key learnings from the Forge appeal include:

  1. Common law considerations for determining whether goods have become a fixture to land will be applied in determining whether personal property is (or has become) a fixture for the purposes of the PPSA. These considerations involve inquiring why, amongst other things, the personal property was brought on the land and the degree to which the goods have been affixed, having regard to factors such as: whether the attachment was for the better enjoyment of the land or the personal property, the nature of the personal property being affixed and whether the affixation was permanent or temporary;
  2. Provisions in agreements (such as that goods will not become fixtures, title will not pass and that goods must be returned at the end of term) are not determinative of whether goods are (or have become) fixtures - it will always be a question of fact applying accepted legal principles to the particular facts;
  3. Electing not to register a financing statement on the PPSR following an erroneous determination that leased goods are (or will become) fixtures will likely be very costly for the financier/lessor; and
  4. If there is any doubt about whether personal property may be considered a fixture, the prudent approach is to both register a financing statement on the PPSR and to obtain a disclaimer of interest in the property from any mortgagee of the land.


Briefly, Forge entered into a contract with Regional Power Corporation, trading as Horizon Power for the design, construction, operation and maintenance of the South Hedland Temporary Power Station in Western Australia. The scope of work under that contract contemplated the lease of gas turbine generators for a fixed term.

Forge entered into a lease with General Electric International Inc (GE) for the gas turbine generators (the Lease). The Lease provided that Forge was responsible for the return of the turbines at the end of term and an acknowledgment that the turbines will remain the property of GE.

GE subsequently sold its business to APR Energy Plc, Power Rental's holding company, and, as a result Power Rental and Power Rental Asset Co Two, LLC acquired the benefit of the Lease.

The turbines were at all relevant times mounted on trailers. However, to ensure the stability of the turbines, "seismic and wind kits" were required to be epoxied into bolts protruding out of the concrete foundation and then bolted to the main trailer on which the turbines sat. Additionally, there was some degree of physical connection between the turbines and the land, as pipelines or conductors were required to deliver the electricity generated from the turbines to the power station's electricity grid.

Neither GE nor Power Rental registered a financing statement on the PPSR in respect of the turbines the subject of the Lease.

Barely one month after Power Rental became lessor, voluntary administrators were appointed to Forge.

Forge argued that the security interest arising under the Lease was unperfected immediately prior to the appointment of the administrators and, as a consequence, the security interest vested in Forge, pursuant to section 267 of the PPSA.

At first instance, Justice Hammerschlag in the New South Wales Supreme Court found that:

  1. the Lease was a 'PPS lease' for the purposes of the PPSA, thereby rejecting the argument that GE was not regularly engaged in the business of leasing goods. (One of the pre-requisites to a lease being a 'PPS lease' is that the lessor must be regularly engaged in leasing goods);
  2. the turbines were not fixtures and were personal property and subject to the PPSA regime. (The PPSA does not apply to interests in land or in fixtures. The PPSA defines a fixture as 'goods, other than crops, which are affixed to land'. The inclusion of a definition of 'fixture' in the PPSA gave rise to a degree of uncertainty as to whether a 'fixture' was something different for the purposes of the PPSA than under common law); and
  3. because the Lease was a 'PPS lease' (and 'PPS leases' are deemed security interests under the PPSA), in order to protect its interests in the turbines, GE and/or Power Rental should have registered a financing statement on the PPSR. Because neither party did so, the security interest was unperfected when administrators were appointed to Forge, and as a consequence, pursuant to section 267 of the PPSA, the security interest vested in Forge.

The net effect of the Justice Hammerschlag's decision was a windfall gain for:

  1. Forge, as the turbines, effectively, became the property of Forge unburdened by any interest of Power Rental; and
  2. Forge's creditors (other then Power Rental) because Forge had more assets, the proceeds of which could be distributed in accordance with the priority regime in the PPSA.

Grounds of Appeal

Amongst other grounds, Power Rental challenged the initial judgement on the grounds that:

  1. the trial judge erred in applying the common law tests for determining whether something was a 'fixture' for the purposes of the PPSA, arguing that a more bespoke inquiry is required in the PPSA context, namely, whether the goods are more than non-trivially attached to the land. If the attachment is non-trivial, the goods were a fixture for the purposes of the PPSA, but not necessarily a fixture for the purposes of the common law;
  2. once installed on the site, the turbines were fixtures for the purpose of section 10 of the PPSA because their attachment was more than trivial and, therefore, the Lease was not a 'PPS lease'. Accordingly, there was no security interest which could vest upon the appointment of administrators to Forge; and
  3. if it was appropriate to interpret fixtures in accordance with the common law, the turbines should not have been found to be fixtures as the trial judge paid no, or insufficient, regard to the purpose of affixation and the physical characteristics of the turbines, all of which pointed to the turbines being fixtures.

The parties submissions

Power Rental maintained that the definition of 'fixtures' for the purposes of the PPSA was bespoke, requiring only an inquiry into whether the goods are physically affixed to the land in a non-trivial manner. Power Rental argued that, if the test is one of physical non-trivial attachment, the evidence plainly demonstrated that the turbines were affixed to the land.

Power Rental argued that the weight and size of the turbines, along with the time taken to install, commission and decommission then, supported the contention that the turbines were fixtures because, while they were movable, they could not be moved month to month. In support, Power Rental drew, and relied heavily on, analogy with tenant's fixtures, which could be fixtures (within the common law meaning) but were able to be removed at the end of the lease term.

In response, Forge argued that Power Rental's favouring of a bespoke meaning for 'fixture' for the purposes of the PPSA would create a new species of interest in goods, that of a 'non-fixture fixture', which would introduce uncertainty and complexity.

In support, Forge referred the Court to various extrinsic materials (including draft papers and commentary prior to the passing of the PPSA), and noted that the fundamental objective of the PPSA was to reduce risk to persons dealing in, and lending money on, the security of personal property. Moreover, Power Rental's interpretation was inconsistent with the legislative purpose as it would create a class of personal property which sat entirely outside of both the PPSA and common law regimes.

Additionally, Forge argued that the inquiry as to whether something was or was not a fixture remained the objective of why the goods were brought on to the land, having regard to the degree and object of annexation.

The Court of Appeal:

  1. endorsed the trial judge's view that the demarcation in the PPSA between land and fixtures on the one hand and personal property on the other supported a construction of fixtures which is based on common law concepts. In relation to the degree that the turbines were annexed to the land, the Court noted that the mode of attachment was one which was intended to be reversible (even though the process of removal might be a "tricky" one);
  2. rejected Power Rental's argument that Justice Hammerschlag had paid no, or insufficient, regard to the factors highlighted by Power Rental, concluding that the trial judge did not place undue weight on the temporary nature of the affixation and the express intention of the parties set out in the Lease and that those matters pointed strongly to the turbines not being fixtures at common law; and
  3. held that, while some inquiries developed by the common law for determining whether goods are fixtures may point in one direction, each case is dependent upon its own particular facts in light of the overall circumstances and, in particular, the degree and purpose of annexation. In this instance, a finding that the turbines were fixtures could not be supported.

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.

Kemp Strang has received acknowledgements for the quality of our work in the most recent editions of Chambers & Partners, Best Lawyers and IFLR1000.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

David Murray-Nobbs
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.