Alert of 16 October 2009 discussed the application for special
leave to the High Court in respect of the Queensland Court of
Appeal's judgement in Re Octaviar Ltd (No 7) 
QCA 282. This was the appeal from the decision of Re Octaviar
Ltd; Re Octaviar Administration Pty Ltd  QSC 37.
A summary of what has happened so far
The Octaviar case considered a registrable charge
under the Corporations Act 2001 (Corporations
Act) which secured all money owing under defined
"Transaction Documents". By designating a new document as
a "Transaction Document" the money secured under the
charge was increased.
At first instance, the Queensland Supreme Court held that this
was a "variation" of the charge, and as such a failure to
notify ASIC within the prescribed period under Chapter 2K of the
Corporations Act rendered the charge void to the extent
that it secured any increased liability.
On appeal, the Queensland Court of Appeal overturned the first
instance decision. It unanimously held that although the
liabilities secured by the charge had been increased, the charge
had not been varied; instead, it simply continued to operate in
accordance with its terms. This decision reflects typical existing
An application for special leave to appeal from the Queensland
Court of Appeal decision to the High Court was filed in October
Application for special leave granted
An application for special leave deals only with the question of
whether the High Court will allow the appeal to proceed to a
hearing and does not address the merits of the case.
In Octaviar, the special leave application was heard on
12 March 2010 and the application was successful. At this stage the
appeal to the High Court is likely to be held in Brisbane in June
and the Full Court will hear the appeal. It is anticipated that in
April or May 2010 the exact date of hearing will become
What does this mean?
For banks, financial institutions and insolvency practitioners,
prudence continues to dictate a cautious approach. It remains the
case that, when restructuring financing documents, it is crucial to
consider whether a variation of a charge that is notifiable under
section 268(2) of the Corporations Act has 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.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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