In the matter of Assta Labels Pty Ltd

[2018] NSWSC 1094

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Assta Labels Pty Ltd [2018] NSWSC 1094

Hearing dates:

11 July 2018

Date of orders:

16 July 2018

Decision date:

11 July 2018

Jurisdiction:

Equity - Corporations List

Before:

Kunc J

Decision:

Period for registration extended

Catchwords:

MORTGAGES AND SECURITIES – Personal property securities – Registration of security interests – Whether Court should extend time for registration – Appropriate form of order – Personal Property Securities Act 2009 (Cth), s 293

Legislation Cited:

Personal Property Securities Act 2009 (Cth)

Cases Cited:

Accolade Wines Australia Ltd [2016] NSWSC 1023
Northern Managed Finance Pty Ltd v 4 in 1 Wyoming Pty Ltd [2017] NSWSC 407; (2017) 120 ACSR 167

Category:

Principal judgment

Parties:

HP Financial Services (Australia) Pty Limited ACN 082 062 413 (Plaintiff)

  Assta Labels Pty Ltd ACN 000 898 742 (First Defendant)
Dashing Print Pty Ltd ACN 162 516 529 (Second Defendant)
PMP Print Pty Ltd ACN 051 706 499 (Third Defendant)
National Australia Bank Limited ACN 004 044 937 (Fourth Defendant)
Westpac Banking Corporation ACN 007 457 141 (Fifth Defendant)
ANZ Fiduciary Services Pty ltd ACN 100 709 493 (Sixth Defendant)
Celmac Digital Pty Ltd ACN 105 110 647 (Seventh Defendant)
Celmac Pty Ltd ACN 097 945 429 (Eighth Defendant)
1835 Funding Pty Ltd ACN 143 584 249 (Ninth Defendant)

Representation:

Counsel:

 

M L Rose (Plaintiff)

 

Solicitors:

  Norton Rose Fulbright (Plaintiff)

File Number(s):

2018/150544

Publication restriction:

No

EX TEMPORE Judgment (REVISED)

1. By originating process filed on 14 May 2018 the plaintiff, HP Financial Services (Australia) Pty Limited (“HPFS”), seeks orders pursuant to s 293(1)(a) of the Personal Property Securities Act 2009 (Cth) (the “PPSA”), extending beyond 15 business days the period specified by s 62(3)(b) of the PPSA for HPFS to perfect by registration certain security interests as a purchase money security interest (“PMSI”) under the PPSA (as PMSIs are defined in s 14 of the PPSA).

2. The relevant security interests are those registered in respect of three grantors: Assta Labels Pty Ltd (the first defendant), Dashing Print Pty Ltd (the second defendant) and PMP Print Pty Ltd (the third defendant) (together, the “Grantors”).

3. There are five other defendants in these proceedings. They are parties who, putting the matter broadly, it could be said will have their interests directly affected by the making of the order sought by HPFS. The Court is satisfied that they have all been served and are aware of today’s proceedings. With the exception of one of the defendants, which has filed a submitting appearance, I would, without disrespect, adopt the term used by Mr M L Rose of Counsel (who appeared for HPFS) that the other defendants appear to have treated the matter with “studied indifference”.

4. I should also record that notice of the proceedings has been given to an additional 76 parties who have registered some form of security interest in respect of the Grantors. There is ample evidence in the material before the Court that those additional parties, having been notified, have either expressed their satisfaction with the explanation given to them by the legal representatives for HPFS with what is being sought to be done today, or have simply not responded.

5. Accordingly, the Court is satisfied that all parties, whether directly or indirectly affected by the orders sought, are on notice of today’s hearing and that none of those parties actively opposes, or wishes to be heard in relation to, the application the subject of these reasons.

6. Section 293 of the PPSA provides:

“Timing--applications for extension of time

(1)   On application, a court may make an order extending the number of business days in a period specified in the following provisions if the court is satisfied that it is just and equitable to do so:

(a)   paragraphs 62(3)(b) (perfection of purchase money security interests);

…

(2)   The court may make the order even if the period has ended.

(3)   In making an order to extend a period under subsection (1), the court must take into account the following:

(a)   whether the need to extend the period arises as a result of an accident, inadvertence or some other sufficient cause;

(b)   whether extending the period would prejudice the position of any other secured parties or other creditors;

(c)   whether any person has acted, or not acted, in reliance on the period having ended.”

7. The present application arises because HPFS initially registered the relevant security interests against the Grantors’ ABNs and not, as required pursuant to s 153 of the PPSA (and in turn Schedules 1.3, 2 and 3 of the PPS Regulations), those companies’ ACNs.

8. This is a problem which the Court has considered before. Mr Rose relied, in particular, on the decision of Brereton J in the matter of Accolade Wines Australia Ltd [2016] NSWSC 1023 (“Accolade”) (a case which, factually and legally, is on all fours with the circumstances of the present case) and Northern Managed Finance Pty Ltd v 4 in 1 Wyoming Pty Ltd [2017] NSWSC 407 (“4 in 1 Wyoming”), a decision of Gleeson JA (which, in part, also considers precisely the same difficulty as has arisen in the present case). Orders for the extension of time for registration were made in both those cases.

9. Those decisions set out at length, and I adopt with respect and gratitude, their Honours’ extensive analysis of the law in relation to applications of this kind. It is not necessary for me to repeat any of that analysis in these reasons because the Court is well satisfied that the circumstances in this case fall within the factual and legal considerations set out in those two judgments as warranting the making of the orders sought. The application of those authorities to the facts of the present case are exhaustively and, in my respectful view, correctly set out in Mr Rose’s written submissions, a copy of which I will direct should be kept with the Court’s file.

10. All that is necessary for me to do is to record, briefly, that the Court has taken into account the matters set out in s 293(3) of the PPSA.

11. As to s 293(3)(a), the Court accepts Mr Rose’s submission that the need to extend the period in the present case arises as a result of inadvertence. Registrations of the relevant interests were purported to be effected within the time required by the PPSA. However, as I have recorded, the difficulty with those registrations was that they referred to the ABN, rather than to the ACN of the Grantors. That had the effect of rendering the registrations defective.

12. The reason that the registration occurred, or was purported to be done, by reference to the ABN rather than the ACN was as a result of an error within HPFS’s organisation. There was a lack of understanding on the part of relevant staff members at the time that it was necessary to effect the registration by reference to the ACN and a lack of appreciation of the difference, for the purposes of the validity of registration, between registering by reference to the ABN rather than the ACN. This is certainly not a case where HPFS did not appreciate the importance of having to register its interest or in some other way deliberately disregarded what had to be done to take advantage of the scheme offered by the PPSA. After the error was discovered, compliant registrations (using the ACNs) were made on 4 October 2016 in relation to each Grantor.

13. As to s 293(3)(b), the concept of prejudice is discussed in both Accolade Wines and 4 in 1 Wyoming. The Court is satisfied that extending the period in this case will not prejudice the position of any other secured parties or other creditors in any relevant sense identified in those cases that would suggest that the orders sought should not be made.

14. As to s 294(3)(c), the Court is satisfied that in circumstances where a search of the register would have revealed HPFS’s interest in the case of each Grantor, no relevant act or failure to act has occurred in reliance on the period having ended.

15. For these reasons, the Court will grant the relief sought by HPFS.

16. The only other matter is the form of order which the Court should make.

17. The form of draft order provided by HPFS to the Court was:

“1. Pursuant to s 293(1) of the Personal Property Securities Act 2009 (Cth) (PPSA), the number of business days set out in s 62(3)(b) be extended by the appropriate number of business days relevant such that:

a. Personal Property Securities Register (PPSR) Registration No: 20160040047065 made by the plaintiff on 4 October 2016 falls within the time period prescribed by s 62(3)(b) of the PPSA as extended by this order;

b. PPSR Registration No: 201610040052924 made by the plaintiff on 4 October 2016 falls within the time period prescribed by s 62(3)(b) of the PPSA as extended by this order;

c. PPSR Registration No: 201610040022788 made by the plaintiff on 4 October 2016 falls within the time period prescribed by s 62(3)(b) of the PPSA as extended by this order.

2.   Any person or entity who has a perfected security interest over collateral the subject of any of the registrations set out in order 1 above, other than any of the fourth to ninth defendants to these proceedings, has liberty to apply to set aside, amend or vary any of orders 1(a), (b) and 1(c) of these orders on three days’ written notice to the plaintiff.

3.   The plaintiff has liberty to apply on three days’ notice.

4.   These orders be entered forthwith.”

18. This order was modelled on that made in 4 in 1 Wyoming. However, in my respectful view, it is desirable, where it is otherwise practical and convenient to do so, that the Court’s order should precisely reflect the power which it is exercising under s 293, namely of “extending the number of business days”. This means that the order should specify exactly the number of business days by which the period is being extended.

19. In expressing this view, I hasten to add that I am not to be taken as suggesting that there was any error or defect in the form of order made by either Gleeson JA or Brereton J in the cases to which I have referred. There may well be cases where, because of the number of interests involved or other factual complexities, it is more convenient for a more general form of order to be made by the Court which would nevertheless clearly be a proper exercise of the power under s 293 of the PPSA.

20. In this case, I have been informed by Mr Rose that there is no practical difficulty with the relevant calculations being made in relation to each Grantor as to the precise number of days by which the period should be extended pursuant to s 293.

21. The only directions I will make at this stage are to direct the plaintiff to bring in a form of order granting the relief sought in the originating process, having regard to what I have said in these reasons about the form that order should take, and that any such revised form of order should be accompanied by an affidavit setting out how the calculation of business days has been done.

Postscript- Final Orders

22. The solicitors for the plaintiff have undertaken the calculations to enable the Court to make orders in accordance with paragraph [18] above, supported by an affidavit explaining the calculations.

23. The Court’s orders are:

1. Pursuant to s 293(1) of the Personal Property Securities Act 2009 (Cth) (PPSA), the number of business days set out in s 62(3)(b) of the PPSA be extended by 389 business days such that the Personal Property Securities Register (PPSR) Registration No: 20160040047065 made by the plaintiff on 4 October 2016 falls within the time period prescribed by s 62(3)(b) of the PPSA as extended by this order.

2. Pursuant to s 293(1) of the Personal Property Securities Act 2009 (Cth) (PPSA), the number of business days set out in s 62(3)(b) of the PPSA be extended by 424 business days such that the PPSR Registration No: 201610040052924 made by the plaintiff on 4 October 2016 falls within the time period prescribed by s 62(3)(b) of the PPSA as extended by this order.

3. Pursuant to s 293(1) of the Personal Property Securities Act 2009 (Cth) (PPSA), the number of business days set out in s 62(3)(b) of the PPSA be extended by 466 business days such that the PPSR Registration No: 201610040022788 made by the plaintiff on 4 October 2016 falls within the time period prescribed s 62(3)(b) of the PPSA as extended by this order.

4. Any person or entity who has a perfected security interest over collateral the subject of any of the registrations set out orders 1, 2 and 3 above, other than any of the fourth to ninth defendants to these proceedings, has liberty to apply to the Corporations List Duty Judge to set aside, amend or vary any of orders 1, 2 and 3 of these orders on three days’ written notice to the plaintiff.

5. The plaintiff has liberty to apply on three days' written notice to the Corporations List Duty Judge.

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Decision last updated: 16 July 2018