In the matter of Qenos Pty Ltd (administrators appointed)

The administrators of Qenos Pty Ltd brought an application to the Federal Court of Australia seeking a declaration that a bailment agreement between Qenos and its lender was a “PPS lease” within the meaning of section 13(1)(b) of the Personal Property Securities Act 2009 (Cth). They argued that the bailment was an unperfected security interest which vested in Qenos under sections 267(1)(a)(ii) and (2) of the Act. The administrators contended that the time at which the bailment arose was material, and that section 13(2)(b) and (3) of the Act applied. The Court was required to determine whether the bailment was a “PPS lease” and whether section 441F of the Corporations Act 2001 (Cth) applied to the bailment.

The Court found that the bailment was not a “PPS lease” because the bailee had exercised a power in relation to the bailed property. The Court held that the time at which the bailment arose was material, and that the application of section 13(2)(b) and (3) of the Act did not assist the administrators. The Court further held that section 441F of the Corporations Act applied to the bailment and that leave under section 440(2)(b) of the Corporations Act would otherwise be granted.

The Court made a declaration that the bailment agreement between Qenos and its lender was not a “PPS lease” within the meaning of section 13(1)(b) of the Personal Property Securities Act. The Court also held that section 441F of the Corporations Act applied to the bailment and that leave under section 440(2)(b) of the Corporations Act would otherwise be granted.