Cathro, in the matter of Cubic Interiors NSW Pty Ltd (in liq)

The case of Cathro, in the matter of Cubic Interiors NSW Pty Ltd (in liquidation) involved an application by the liquidator of several companies within the Cubic Group, seeking relief in relation to a loan agreement and general security deed (GSD) and the registration of a security interest on the Personal Property Securities Register (PPSR). The companies had been placed in liquidation due to financial difficulties exacerbated by the COVID-19 pandemic. The liquidator sought to restructure the debt of the companies, resulting in the replacement of the National Australia Bank (NAB) as a secured creditor with Egerton, and the elevation of Assetinsure to first ranking security holder. The issue central to the case was whether section 588FL of the Corporations Act 2001 (Cth) applied to the security interest granted by the liquidator to Egerton, which was registered after the appointment of the liquidators, referred to as the "critical time".

The legal issues the court had to decide centred around the interpretation of section 588FL of the Corporations Act and its application to security interests granted post the critical time. The court had to determine whether the liquidator was justified in not seeking an extension of time for the registration of the Egerton Security under section 588FM of the Act, and whether an order should be made extending the time for registration to 9 December 2021, the date on which the Egerton Security was registered on the PPSR.

In its reasoning, the court examined the approach taken by various judges in single judge decisions, noting a divergence in the application of section 588FL to security interests granted after the critical time. The court concluded that the approach taken in K.J. Renfrey and followed by subsequent cases should be adopted, meaning that section 588FL did apply to security interests granted after the critical time. The court granted the application for an order extending the time for registration of the Egerton Security to 9 December 2021, and also awarded costs to the liquidator out of the assets of the companies in liquidation.

The court's decision provided clarity on the application of section 588FL to security interests granted post the critical time, aligning with the approach taken in K.J. Renfrey and subsequent cases. This decision ensured that the liquidator was justified in not seeking an extension of time for the registration of the Egerton Security, and also provided a definitive timeline for the registration of the security interest.