Australia: Extension Of Time For Lodging Notice Of Charge

Key Points:
Simply because the grounds exist on which the extension of time may be granted did not mean that this extension would be granted in all circumstances.

In light of the recent decision in Re Octaviar Ltd; Re Octaviar Administration Pty Ltd [2009] QSC 37 it is timely to look at the manner in which the courts will exercise their discretion to grant an extension of time to lodge a registrable charge, or a registrable variation of such a charge, with the Australian Securities and Investments Commission (ASIC).


Under section 266(1) of the Corporations Act 2001 (Cth) an ASIC registrable charge will be void as security against a liquidator, administrator or deed administrator of the relevant chargor if it is not lodged with ASIC within 45 days of the date of its creation or at least six months prior to the date on which relevant insolvency proceedings commence (being the commencement of liquidation or administration). A similar rule applies under section 266(3) in respect of the registration of a variation of a charge which increases the amount secured by the charge (though in those circumstances the charge is only void to the extent of the increase in the amount secured).

If an ASIC registrable charge is not lodged within 45 days of the date of its creation (or a registrable variation is not lodged within 45 days of the date it occurs), an extension of time may be sought under section 266(4) of the Corporations Act to avoid the consequences of the application of section 266(1) or 266(3). In Bevillesta Pty Ltd v Imagine UN Ltd (2009) 69 ACSR 574 Justice Robson of the Supreme Court of Victoria considered such an application.

In this case, the Supreme Court was satisfied that it should exercise its discretion to extend the period of time for lodgement. However, given concerns raised in relation to the solvency of the chargors, the extension was granted on the condition that any liquidator, administrator, deed administrator or creditor of a chargor would have the right to apply to discharge or vary the order in the event that winding up or administration commenced within six months of the date that registration of the charge. Therefore the chargee received little practical benefit from the extension of time granted.


Bevillesta Pty Ltd (BPL) had subscribed for $2 million in convertible notes in Imagine UN Ltd (IUL). IUL's obligations in respect of the convertible notes were secured by a charge given by IUL dated 25 March 2008. Six IUL subsidiaries also granted charges.

Under the Corporations Act, it is the chargor company itself that has the obligation to register a registrable charge with ASIC. In this case, the charge documents also imposed a contractual obligation on the chargors to register as well (unless BPL elected to do so, which did not occur). When the solicitors for BPL realised that registration had not occurred, they arranged registration. The charges were therefore not registered until 30 October 2008, well beyond the 45 day time period required for registration.


Justice Robson considered:

  • Had BPL satisfied the statutory requirements to enable the court to exercise its discretion to extend the time for lodgement of the charges?
  • Had BPL provided sufficient evidence of the chargors' solvency?
  • Should the court exercise its discretion to extend the time for registration and, if so, on what terms?

Condition For Exercise Of Discretion

Section 266(4) of the Corporations Act states:

"The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Part:

  1. was accidental or due to inadvertence or some other sufficient cause; or
  2. is not of a nature to prejudice the position of creditors or shareholders;

or that on other grounds it is just and equitable to grant relief, may on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order."

Therefore before the discretion to extend the time for lodgement could be exercised by a court, the applicant would need to establish that the reason for the failure to lodge within 45 days of the relevant date (either the date of the creation of the charge or the date of the variation) was due to a cause specified in section 266(4)(a), would not prejudice creditors or shareholders or that it was otherwise just and equitable to grant relief.

On the facts, the chargors had failed to lodge notice of the charges in breach of their statutory and contractual obligations to do so. The chargee had not become aware of this for some time. Justice Robson considered that this established "other grounds" which made it just and equitable to grant the application. Potentially, these facts also established that the failure to register was from "some other sufficient cause" for the purposes of section 266(4)(a).

Evidence Of Solvency And Exercise Of Discretion

Simply because the grounds exist on which the extension of time may be granted did not mean that this extension would be granted in all circumstances. Justice Robson examined the relevant authorities and summarised a number of general principles from those authorities, the most important of which were:

  1. A court will need to take into consideration the interests of all parties that might be impacted by the making of an order to extend the time for registration. This would include unsecured creditors (but not secured creditors, who would have the priority of their securities determined in accordance with Chapter 2K of the Corporations Act). The interests of shareholders may also be relevant.
  2. An extension of time will only be granted in extraordinary circumstances if winding up of the chargor has already commenced at the time the application is made.
  3. As a general rule, a court will give consideration to the financial position of the chargor. This leads to the following consequences:
    1. A court will not be persuaded that, where "mere inadvertence" led to the failure to lodge the notice, the extension of time simply puts the chargee in the position it would otherwise have been in had it not failed to register in time and therefore the interests of unsecured creditors should not be considered affected. The court will look at the interests of the unsecured creditors if there is the possibility of insolvency of the chargor.
    2. If there are no solvency issues, then it is more likely that a court will exercise its discretion to grant the extension of time.
    3. If liquidation or administration of the chargor is likely in the short term, it is more likely that an extension will not be granted or will be granted conditionally.
    4. If evidence of solvency is not presented, then the court may, for example, allow certain unsecured creditors to be joined to the proceedings or grant the extension but on the basis that conditions are imposed to protect the interests of unsecured creditors.

On the facts of this case, there was some concern that the chargors may have been approaching insolvency. Therefore Justice Robson granted the extension of time requested but did so on the condition that the chargors or any liquidator, administrator, deed administrator or creditor of a chargor could apply to discharge or vary the order for the extension in the event winding up or administration of a chargor commenced within six months of the date that registration actually occurred.

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.

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.

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.