Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receiver Appointed) and Ors

Clone Pty Ltd (the applicant) sought declarations and orders against Players Pty Ltd (in liquidation) and its receivers (the respondents) concerning the validity of a charge granted by Players to Clone. The dispute arose from the appointment of receivers to Players and the subsequent actions taken by those receivers, which Clone alleged interfered with its security interests. The matter was heard in the High Court of Australia.

The primary legal issues before the High Court were whether the charge granted by Players to Clone was valid and enforceable, and whether the appointment of receivers by Players' secured creditors had the effect of crystallising Clone's charge. Specifically, the court had to consider the interaction between the crystallisation of a floating charge and the priority of a subsequently granted fixed charge, as well as the implications of a company being in liquidation.

The High Court held that the charge granted by Players to Clone was a fixed charge over specific assets, not a floating charge. Consequently, it did not crystallise upon the appointment of receivers. The court reasoned that a fixed charge attaches to specific assets from the moment it is created and does not require any further event to crystallise. The validity of the charge was not affected by the subsequent appointment of receivers by other secured creditors, nor by the company's liquidation. The court applied principles relating to the nature of fixed and floating charges, and the effect of crystallisation, confirming that a fixed charge remains fixed and does not become a floating charge that then crystallises.

The High Court made declarations that the charge granted by Players to Clone was a valid and enforceable fixed charge over the specified assets, and that the appointment of receivers by Players' other secured creditors did not crystallise Clone's charge. The court also made orders restraining the receivers from dealing with the assets subject to Clone's charge.