Re Bellerine Heights Pty Ltd
[2020] VSC 874
•21 December 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2020 03869
| IN THE MATTER of BELLERINE HEIGHTS PTY LTD (ACN 615 582 968) |
| BETWEEN : |
| AUSTIN FINANCE PTY LTD (ACN 632 635 771) in its own capacity and as trustee for the AUSTIN FINANCE UNIT TRUST (ABN 33 253 937 970) |
| Plaintiff |
| - and - |
| BELLERINE HEIGHTS PTY LTD (ACN 615 582 968) in its own capacity and as trustee for the BELLERINE HEIGHTS DEVELOPMENT TRUST (ABN 38 756 008 210) & ORS (as set out in the attached schedule) |
| First defendant |
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JUDGE: | SLOSS J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 7 December 2020 |
DATE OF JUDGMENT: | 21 December 2020 |
CASE MAY BE CITED AS: | Re Bellerine Heights Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 874 |
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CORPORATIONS − Where lender failed to register security interests on the Personal Property Securities Register within the prescribed time —Where lender made application for extension of time for registration pursuant to Corporations Act 2001 (Cth) s 588FM — Whether failure to register in timely way was accidental or due to inadvertence — Where borrowers and grantors were joined as defendants and afforded an opportunity to be heard − Where secured creditors were notified and afforded an opportunity to be heard —Where Court satisfied that failure to register security interests on the Personal Property Securities Register within the prescribed time was accidental or due to inadvertence − Held, appropriate to exercise discretion under s 588FM to fix later time for registration, and to reserve liberty to unsecured creditors and any liquidator or administrator to apply to set aside the order in the event of a liquidation or insolvency.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms V E Bell of counsel | Norton Rose Fulbright Australia |
| For the Defendants | No appearance |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Relevant factual background........................................................................................................... 5
Relationship between the parties................................................................................................ 5
The Austin Finance transaction.................................................................................................. 7
Prior Monark transaction........................................................................................................... 10
Subsequent Ritz Furniture transaction.................................................................................... 11
No subsequent security interests have been registered on the PPS Register over Bellerine Heights, Bell Heights or the Grantors............................................................................ 11
Relevant legal principles................................................................................................................ 12
Inadvertence................................................................................................................................ 13
No prejudice to creditors or shareholders............................................................................... 14
Discretionary factors................................................................................................................... 17
Consideration of present application........................................................................................... 18
Was the failure to register the collateral accidental and due to inadvertence?................. 18
Whether there is any prejudice to the position of creditors or shareholders..................... 19
Bellerine Heights................................................................................................................ 19
Bell Heights........................................................................................................................ 20
Bell-East............................................................................................................................... 21
Bayview Geelong............................................................................................................... 22
Moorabool........................................................................................................................... 22
Ritz Geelong....................................................................................................................... 23
Conclusion......................................................................................................................................... 26
HER HONOUR:
Introduction
By originating process filed on 7 October 2020, the plaintiff seeks an order pursuant to section 588FM(1) of the Corporations Act 2001 (Cth) (Corporations Act) extending the time for registration in respect of certain registrations of security interests on the register established under the Personal Property Securities Act 2009 (Cth) (PPSA and PPS Register).
Under the PPSA, where a company grants a PPSA security interest, it must be registered on the PPS Register within the time period set out in section 588FL(2), in order to avoid the risks associated with section 588FL of the Corporations Act. Relevantly, the note to s 588FM(1) states:
Note:If an insolvency-related event occurs in relation to a company, paragraph 588FL(2)(b) fixes a time by which a PPSA security interest granted by the company must be registered under the Personal Property Securities Act 2009, failing which the security interest may vest in the company.
That is, the note draws attention to the effect of section 588FL(2), which is that when a company is being wound up, an administrator has been appointed or a deed of company arrangement executed, any PPSA security interest which has not been registered on the PPS Register within the time period set out in section 588FL(2), will vest in the company.
In the present case, a financing transaction (which I refer to below as the Austin Finance transaction) was completed in relation to a development called ‘The Ritz’ development in Bellerine Street, Geelong, but the relevant security interest was not registered until some 12 months after it became effective. The solicitors acting on the transaction have deposed that while they were aware of the need to register the security interests on the PPS Register within (relevantly) 20 business days to avoid the risks associated with section 588FL, through oversight and inadvertence on their part, PPSA registration was overlooked and did not take place within 20 business days after 26 September 2019 (being the date when the relevant security agreements came into force). As matters transpired, it was not until about 12 months later, in September 2020, when the solicitors were performing work on a further financing transaction related to The Ritz development, that they realised the security interests granted under the earlier financing transaction had not been registered, whereupon they took steps promptly to cause those security interests to be registered on the PPS Register on 29 September 2020.
The power conferred by section 588FM to extend the time for registration is discretionary. Here, in seeking an extension of time, the plaintiff relies on two grounds under section 588FM. First, it contends that the failure to register the collateral in a timely way was accidental and due to inadvertence (s 588FM(2)(a)(i)). Alternatively, the plaintiff submits that the orders sought will not prejudice the position of the defendants’ creditors or shareholders (s 588FM(2)(a)(ii)).
In support of its application, the plaintiff relies on the following substantive affidavits:
(a) affidavit of John Azzopardi affirmed 7 October 2020 (Azzopardi affidavit);
(b) affidavit of Scott William Millar affirmed 7 October 2020 (first Millar affidavit);
(c) second affidavit of Scott William Millar affirmed 6 November 2020 (second Millar affidavit);
(d) third affidavit of Scott William Millar affirmed 30 November 2020 (third Millar affidavit); and
(e) affidavit of Cassandra Jayne Mortimer affirmed 2 December 2020 (Mortimer affidavit.
Mr Millar is a partner in the firm of solicitors Norton Rose Fulbright Australia (NRFA). NRFA acted for the plaintiff, amongst others. Mr Millar has had the supervisory carriage of the transaction the subject of the application, and is authorised to make affidavits on its behalf. Each of Mr Azzopardi and Ms Mortimer is an associate at NRFA and is likewise authorised to make affidavits on the plaintiff’s behalf.
In addition, several affidavits of service have also been filed on behalf of the plaintiff.[1]
[1]See affidavit of David O’Sullivan affirmed 4 November 2020, affidavit of Kelly Malcolm affirmed 5 November 2020, second affidavit of David O’Sullivan affirmed 19 November 2020, affidavit of Gregory James Thompson sworn 25 November 2020; and the third Millar affidavit.
Counsel for the plaintiff has also filed an extensive outline of submissions which conveniently summarises the background to the Austin Finance transaction, outlines the relevance of the two other parties with registered security interests over the defendants, explains the circumstances in which the plaintiff’s solicitors failed to register financing statements in relation to the Austin Finance transaction, and then sets out the relevant case law and seeks to apply it to the present case. That outline has been of assistance in enabling these reasons to be delivered within a short time frame.
The application has been made without the benefit of a contradictor appearing before the Court. The relevant financing transaction took place between a number of ‘related entities’ (as that term is defined in section 9 of the Corporations Act) each of whom has been named as a defendant to the originating process. Despite having been served with the relevant materials, none of them has filed an appearance or otherwise sought to appear on the hearing of the plaintiff’s application.
Each of the defendants was also informed by the plaintiff’s solicitor of the date and time for the hearing of the application and was asked whether they intended to consent to, or oppose, the orders sought. Relevantly:
·On 30 October 2020, Mr Bruce Roberts, one of the directors of the fifth defendant (Moorabool), responded by email stating that he consented to the orders sought in the application.[2]
·On 17 November 2020, Mr Rick Henery, a director of the third defendant (Bayview Geelong) responded by stating ‘I do not intend to appear and I do consent to the orders.’[3]
·On 18 November 2020, Ms Wendy Glasson of McMillans, Accountants and Advisors, the registered office of the fourth defendant (Bell-East), emailed the plaintiff’s solicitors and provided on behalf of the fourth defendant ‘consent to proceed with the proposed actions as set out in the letter attached in order to register relevant security interests in relation to Austin Finance.’[4]
[2]Second Millar affidavit, [43] and exhibit SWM-47.
[3]Third Millar affidavit, [14] and exhibit SWM-58.
[4]Third Millar affidavit, [20] and exhibit SWM-61.
To date, no other responses have been received from any of the other defendants stating their respective positions with regard to the application.
The plaintiff also served the originating process and relevant materials on Monark Finance Dev 53 Pty Ltd (Monark), the financier involved in a transaction that preceded the relevant transaction, and on Ritz Furniture Pty Ltd (in its personal capacity and in its capacity as trustee for the Ritz Furniture Trust) (Ritz Furniture), the financier involved in the later transaction that took place in September 2020. The plaintiff’s solicitor also informed both Monark and Ritz Furniture by letter of the date and time for the hearing of the application and asked if they intended to appear in the application.[5]
[5]Second Millar affidavit, [54] and exhibit SWM-53.
The plaintiff’s solicitor has deposed that the priority interests of Monark, the plaintiff and Ritz Furniture are regulated by a deed of priority and subordination that was entered into on 8 September 2020 (Priority Deed) and that each subordinated security interest has been consented to by the higher-ranking security interest holders. Further, the searches of the PPS Register before the Court show that there have been no security interests registered in respect of any of the defendants since 26 September 2019, save for the Ritz Furniture registrations which were consented to in the Priority Deed and also the registrations made on 29 September 2020 in favour of the plaintiff in respect of the Austin Finance Transaction.
On the morning of the hearing, the plaintiff’s solicitors informed the Court that they had received a letter from the solicitors for Monark dated 4 December 2020 in which they refer to recent correspondence, and in particular the acknowledgement that Austin Finance is regulated by the Priority Deed, and state:[6]
On the basis of that acknowledgment, and also on the assumption that the Application will not in any way affect or interfere with Monark’s statutory priority in respect of its registrations on the Personal Property Securities Register ahead of your client’s proposed registration, our client does not seek leave to appear in respect of the Application.
[6]Letter from Arnold Bloch Leibler to Mr Scott Millar of NRFA dated 4 December 2020.
To date, no response has been received from Ritz Furniture in relation to its position with regard to the application.
While the preferable course is for applications for relief pursuant to section 588FM of the Corporations Act not to be brought ex parte, the authorities indicate that where the grantor has been joined to the originating process, has been notified of the proceedings and confirmed that it does not oppose the orders sought, the Courts will generally allow the application to proceed on an ex parte basis.[7] In the present case, in circumstances where the defendants and the other two secured creditors have each been served and have opted not to appear at the hearing of the application, it is appropriate to do so.
[7]See Re David Brown Gear Industries Pty Ltd [2017] NSWSC 907; Re Appleyard Capital Pty Ltd [2014] NSWSC 782 and In the matter of Psyche Holdings Pty Ltd [2018] NSWSC 1254.
Relevant factual background
Relationship between the parties
The PPSA registrations and the plaintiff’s application concern a financing transaction that occurred between a number of ‘related entities’ (as that term is defined in section 9 of the Corporations Act) in September 2019.
The plaintiff, Austin Finance Pty Ltd in its own capacity and as trustee for the Austin Finance Unit Trust (Austin Finance), conducts its business as trustee of the Austin Finance Unit Trust of which it is the sole trustee. Austin Finance operates a special purpose financial services business which exists solely for the purpose of providing subordinated debt to the first defendant, Bellerine Heights Pty Ltd in its own capacity and as trustee for the Bellerine Heights Development Trust (Bellerine Heights).[8] Bellerine Heights is the trustee of the Bellerine Heights Development Trust (BHD Trust).[9]
[8]First Millar affidavit, [6].
[9]First Millar affidavit, [9].
The purpose of the facility provided by Austin Finance to Bellerine Heights is ‘to fund the development of a 10-storey apartment building. . .which will be operated as a short stay facility known as The Ritz.’[10] Bellerine Heights is the development company for the development.[11] The evidence is that the development, which includes an hotel,[12] ‘is near to being complete’.[13]
[10]Second Millar affidavit, [9] (referring to item 5 of Schedule 2 to the Austin Finance Loan Agreement exhibited at confidential exhibit SWM-21).
[11]Ibid.
[12]Second Millar affidavit, [14].
[13]Second Millar affidavit, [13], third Millar affidavit at [30(b)] and exhibit SWM-65 which shows photos of the near completed development.
At all relevant times, the sole directors and shareholders of Austin Finance were —and still are —Gerard Witts, Bruce Roberts, Glen Brooks and Phillip Petch (Directors). At all relevant times, the Directors were —and still are —also the directors and shareholders of Bellerine Heights and the second defendant, Bell Heights Management Pty Ltd, in its own capacity and as trustee for the Bell Heights Management Trust (Bell Heights). Bell Heights is the management company for the development, and it will manage the hotel part of the development under certain management rights granted to it.[14]
[14]Second Millar affidavit, [14].
The third to sixth defendants, being:[15]
[15]First Millar affidavit, [10]. A copy of the BHD Trust Fixed Trust Deed and Amendment Deed, listing each of the Grantors as unit holders of the BHD Trust appears as ‘confidential exhibit SWM-4’ to the first Millar affidavit.
(a) Bayview Geelong Pty Ltd in its own capacity and as trustee for the Bayview Geelong Unit Trust (Bayview Geelong);
(b) Bell-East Property Pty Ltd in its own capacity and as trustee for the Bell-East Property Trust (Bell-East);
(c) Moorabool Partners Pty Ltd in its own capacity and as trustee for the Bellerine Ritz Unit Trust (Moorabool); and
(d) Ritz Geelong Pty Ltd in its own capacity and as trustee for the Ritz Geelong Unit Trust (Ritz Geelong),
together called the ‘Grantors’, are unit holders in the BHD Trust and therefore are related entities to Bellerine Heights, within the meaning of the Corporations Act.
Bayview Geelong, Bell-East and Moorabool (but not Ritz Geelong) also share common directors and shareholders with Bellerine Heights and Bell Heights.[16]
[16]First Millar affidavit, [13].
To assist the Court, the plaintiff’s solicitors prepared a chart summarising the relationships between the parties, a copy of which appears as Annexure A to these reasons.
The Austin Finance transaction
This proceeding relates to a loan agreement between Austin Finance and Bellerine Heights (Austin Finance Loan Agreement), pursuant to which Austin Finance provided Bellerine Heights with a $[redacted] facility for The Ritz development.[17] The Austin Finance Loan Agreement was executed on 26 July 2019, but was neither effective nor dated until 26 September 2019.[18]
[17]First Millar affidavit, [21].
[18]First Millar affidavit, [29].
The Austin Finance Loan Agreement was secured by, among other things:
(a) a general security interest granted by Bellerine Heights over all its present and after acquired property;
(b) a guarantee from the second defendant, Bell-Heights.[19] The guarantee was supported by a General Security Deed, pursuant to which Bell Heights granted a general security interest over all of its present and after acquired property;
(c) specific security interests outlined in paragraph 27 below; and
(d) certain registered mortgages over real property.
[19]Ibid, [22(a)].
The Grantors (i.e., Bayview Geelong, Bell-East, Moorabool and Ritz Geelong) entered into a Specific Security Deed in support of the Austin Finance Loan Agreement, pursuant to which they each granted security interests in their units in the BHD Trust in favour of Austin Finance (Austin Finance SSD).[20] The Austin Finance SSD was executed on 26 July 2019, but was neither effective nor dated until 26 September 2019.[21]
[20]First Millar affidavit, [22(c)] and confidential exhibit SWM-23.
[21]Ibid, [29].
Pursuant to section 588FL(2)(b) of the Corporations Act, financing statements registering Austin Finance’s general security interest over the present and after-acquired property of Bellerine Heights and its specific security interests over the Grantor’s units in the BHD Trust should have been registered on the PPS Register within 20 business days after the relevant security agreements came into force. That is, registration was required to be effected within 20 business days after 26 September 2019. However, it was not until 29 September 2020 that Mr Azzopardi caused the financing statements to be registered on the PPS Register.
Mr Azzopardi has deposed that:
(a) subject to the supervision of Mr Millar, he had the day-to-day conduct of the work related to the Austin Finance transaction;[22]
[22]Azzopardi affidavit, [5].
(b) NRFA has certain internal processes in place when security interests need to be registered on the PPS Register, including the preparation of a financing statement checklist;[23]
[23]Ibid, [9].
(c) due to oversight he did not prepare the checklist, create a ‘secured party group’ (SPG) for Austin Finance or register or cause the security interests created by the Austin Finance Transaction to be registered on the PPS Register;[24]
[24]Ibid, [11].
(d) in or around September 2020, he was assisting Bellerine Finance in relation to the Ritz Furniture financing transaction (see paragraphs [34]–[38] below), and in the course of that work realized that the security interests created by the Austin Finance transaction had not been registered on the PPS Register;[25]
(e) upon this issue coming to his attention, he immediately notified Mr Millar;[26] and
(f) on Mr Millar’s directions and instructions received from the client, and following creation of an SPG for Austin Finance, on 29 September 2020 he caused the Financing Statements for the Austin Finance security interests to be registered on the PPS Register on behalf of Austin Finance.[27]
[25]Ibid, [12]–[14].
[26]Ibid, [15].
[27]Ibid, [16].
Those registered security interests bear the following registration numbers:
(a) 202009290034368 and 202009290034427 in respect of Bellerine Heights;[28]
[28]Exhibit SWM-14.
(b) 202009290034254 and 202009290034462 in respect of Bell Heights;[29]
[29]Exhibit SWM-15.
(c) 202009290037335 and 202009290037374 in respect of Bayview Geelong;[30]
[30]Exhibit SWM-16.
(d) 202009290037342 and 202009290037390 in respect of Bell-East;[31]
(e) 202009290037357 and 202009290037405 in respect of Moorabool;[32]
(f) 202009290037361 and 202009290037422 in respect of Ritz Geelong.[33]
[31]Exhibit SWM-17.
[32]Exhibit SWM-18.
[33]Exhibit SWM-19.
There are two registration numbers in each case, because when granting the security, each of the defendants acted both in its own capacity and as trustee of the relevant trust, thereby necessitating separate registrations against the company’s ACN and the trust’s ABN in order to be effective.
Prior Monark transaction
Prior to entering into the Austin Finance Loan Agreement, Bellerine Heights had borrowed money from Monark under a construction facility dated 22 May 2019 (Monark Loan Agreement).[34]
[34]First Millar affidavit, [15].
The Monark finance transaction was secured by, among other things:[35]
[35]Ibid, [16].
(a) a General Security Deed dated 22 May 2019 entered into by Bellerine Heights, pursuant to which Bellerine Heights granted a general security interest over its present and after acquired property;
(b) a guarantee from Bell Heights, supported by a general security interest over its present and after acquired property;
(c) a Specific Security Deed entered into by the Grantors, pursuant to which they granted a specific security interest over their units in the BHD Trust; and
(d) certain real property mortgages.
Subsequent Ritz Furniture transaction
In September 2020, Bellerine Heights sought further finance from Ritz Furniture Pty Ltd in its personal capacity and in its capacity as trustee for the Ritz Furniture Trust (Ritz Furniture).[36]
[36]Ibid, [32].
The purpose of the Ritz Furniture financing was to fund furniture packages for the development, whereby a purchaser of an apartment, unit or lot in The Ritz development could purchase specified furniture or white goods in connection with their contract of sale for the relevant property.[37]
[37]Ibid, [33].
In support of a loan agreement dated 21 September 2020, Bellerine Heights entered into a General Security Deed dated 21 September 2020, pursuant to which Bellerine Heights granted a security interest to Ritz Furniture over all of its present and after- acquired property.[38]
[38]Ibid, [34] and confidential exhibit SWM-27.
On 8 September 2020, Bellerine Heights, Monark, Austin Finance and Ritz Furniture entered into the Priority Deed in respect of the respective security interests of Austin Finance, Monark and Ritz Furniture over the assets of Bellerine Heights, Bell-Heights and the Grantors.[39]
[39]Ibid, [36] and confidential exhibit SWM-28.
Relevantly, as Mr Millar has observed, the priority of the security interests of Monark, Austin Finance and Ritz Furniture are regulated by the Priority Deed and each subordinated security interest has been consented to by the higher-ranking security interest holders.[40]
No subsequent security interests have been registered on the PPS Register over Bellerine Heights, Bell Heights or the Grantors
[40]Ibid, [49].
Perusal of the PPS Register searches performed on 1 October 2020 and exhibited by Mr Millar to his first affidavit[41] show that there have been no security interests registered on the PPS Register in respect of either Bellerine Heights, Bell Heights or the Grantors since 26 September 2019 save for the Ritz Furniture registrations which were consented to in the Priority Deed and the Austin Finance transaction registrations which took place on 29 September 2020.
[41]Exhibits SWM-14 to SWM-19.
On 1 December 2020 fresh PPS Register searches were obtained for each of the defendants in their individual capacity as well as in their capacity as trustees of the respective trusts.[42] Ms Mortimer deposes that perusal of those searches reveals no indication that any security interests have been registered against any of the defendants (in their own capacities or in their capacities as trustee) since the originating process was filed on 7 October 2020.[43]
[42]Mortimer affidavit, [5] and exhibit CJM-02.
[43]Ibid.
Relevant legal principles
As noted earlier, in circumstances where there is an order or resolution for the winding up of a company, an administrator is appointed or a deed of company arrangement executed, any security interest which has not been registered on the PPS Register within the time period set out in section 588FL(2), will vest in the company.
Section 588FL(2)(b) provides that where a security interest is enforceable against third parties and is perfected by registration, and by no other means, the registration time for the collateral is after the latest of the following times:
(i)6 months before the critical date;
(ii)the time that is the end of 20 business days after the security agreement that gave rise to the security interest came into force, or the time that is the critical time, whichever is the earlier;
(iii)[relates to security interests coming into force under the law of a foreign jurisdiction];
(iv)a later time ordered by the Court under section 588FM.
Section 588FM of the Corporations Act provides:
(1)A company, or any person interested, may apply to the Court (within the meaning of section 58AA) for an order fixing a later time for the purposes of subparagraph 588FL(2)(b)(iv).
(2)On an application under this section, the Court may make the order sought if it is satisfied that:
(a)the failure to register the collateral earlier:
(i)was accidental or due to inadvertence or some other sufficient cause; or
(ii)it is not of such a nature as to prejudice the position of creditors or shareholders; or
(b)on other grounds, it is just and equitable to grant relief.
(3)The Court may make the order sought on any terms and conditions that seem just and expedient to the Court.
In In the matter of Cardinia Nominees Pty Ltd, Black J observed that the terms of section 588FM ‘are broadly similar to the circumstances in which the court could previously extend the time for lodgement of a notice of a charge under s 266(4) of the Corporations Act.’ [44]
[44][2013] NSWSC 32, at [12] (Cardinia).
Importantly, the power conferred by section 588FM is discretionary. Counsel for the plaintiff submitted that factors which may impact the exercise of the Court’s discretion include delay, and the presence or absence of prejudice to creditors or shareholders (where the application is not made under s 588FM(2)(a)(ii) of the Act).
In this case, the plaintiff relies on two grounds under section 588FM. First, that the failure to register the collateral earlier was accidental and due to inadvertence (s 588FM(2)(a)(i)). Second, that the orders sought will not prejudice the position of the defendants’ creditors or shareholders (s 588FM(2)(a)(ii)).
Inadvertence
In Re Accolade Wines Australia Ltd, Brereton J considered the concept of ‘inadvertence’ and its meaning in the context of section 588FM, and stated:[45]
For the purpose of s 588FM(2)(a)(i), “inadvertence” includes failure to advert to or understand the requirement for registration within the specified period, and innocent error in the sense of failure to register through ignorance of the legal requirement to do so, or of the consequences of not doing so.[46] Inadvertence will readily be found where an error of a secured creditor in not attending to registration of its security within time is innocent and does not result from any disregard of its statutory obligations.[47]
[45][2016] NSWSC 1023, at [14] (Re Accolade Wines).
[46]Sanwa Australia Finance Ltd v Ground-Breakers Pty Ltd (in liq) [1991] 2 Qd R 456; (1990) 2 ACSR 692; Campbell Finance Pty Ltd v Vivstan Packaging (Aust) Pty Ltd (in liq) [1998] 2 VR 340; (1996) 22 ACSR 109; Freightlines Northern Territory Pty Ltd (1999) 32 ACSR 573, at 576; Cardinia Nominees, at [14]–[16]; Re Appleyard, at [10].
[47]Re Kris Cruisers Ltd [1949] 1 Ch 138, at 142; National Australia Bank v Davis & Waddell (Vic) Pty Ltd (2003) 44 ACSR 296; (2003) 21 ACLC 1401; [2003] VSC 1, at [67]; Cardinia Nominees, at [15]; Re Carpenter International Pty Ltd (2016) 111 ACSR 477, at 521 [218]-[219]; [2016] VSC 118.
In Bluewaters Power 1 Pty Ltd, Vaughan J observed that inadvertence ‘is concerned with human error or oversight or being “not properly attentive”’.[48] His Honour continued, noting that inadvertence ‘will readily be found where an error of a secured creditor in not attending to registration of its security within time is innocent and does not result from any disregard of statutory obligations.’[49]
[48][2019] WASC 438, at [40] (Bluewaters), citing Re Ace Funding Ltd (2003) 44 ACSR 363, at [8] where Conti J used the description ‘inadvertent’ in the sense adopted by the Full Court of the Supreme Court of Western Australia in Hamilton v Property Investments Ltd (1983) 7 ACLR 932, at 935, namely ‘not properly attentive’, something to be distinguished from an intention to refrain from action.
[49]Ibid, at [41], citing Re Accolade Wines, at [14].
No prejudice to creditors or shareholders
The authorities addressing the lack of prejudice to creditors under section 588FM (2)(a)(ii) indicate that the relevant type of prejudice is the prejudice attributable to the delay in registration, rather than prejudice from making the order (which is inevitable).[50]
[50]Re Accolade Wines, at [18].
In Re Appleyard Capital Pty Ltd, Brereton J observed that ‘relevant prejudice is not necessarily established merely by showing that the dividend to unsecured creditors will be less if the security interest does not vest in the company’.[51] In the later case of Re Transurban CCT Pty Ltd (in its own capacity and as trustee for the Transurban CCT Trust), his Honour referred to his decision in Re Appleyard and reiterated that secured creditors are not affected by an order made under section 588FM and thus there is no need to make an order or impose a condition. But, his Honour explained, the interests of unsecured creditors stand in a different position, stating:[52]
On the other hand, the interests of unsecured creditors are a relevant consideration, since in the only event that will make the order sought of practical importance they will be deprived of the benefit of having the security vest in the company and it will instead be preserved for the benefit of the unsecured creditors. Thus it is relevant to consider the financial position of the company, because if the company is shown to be financially secure and it is unlikely that a “critical day” will arise in the foreseeable future and solvency is established, that is likely to be the end of the matter. On the other hand, where the Court cannot be satisfied that there is no risk that unsecured creditors could be adversely affected, they are entitled to be heard against the making of the order, although that may be sufficiently achieved, depending on the degree of risk involved, by suspending the operation of the order or imposing a term reserving leave to apply to set it aside in the event of a liquidation or administration [Appleyard Capital, [25]].
[51](2014) 101 ACSR 629, at [30] (Re Appleyard).
[52][2014] NSWSC 1909, at [10] (Re Transurban).
In Bevillesta Pty Ltd v Imagine UN Ltd, Robson J summarised the relevant principles that apply to the provision of evidence of solvency and the interests of unsecured creditors as follows:[53]
[53](2009) 69 ACSR 574, at 581 [28] (Re Imagine UN Ltd).
(11)An applicant for an extension should bring forth evidence of the solvency of the company and the likelihood of its solvency being maintained into the foreseeable future: In re L.H. Charles & Co Ltd [54] and Re Guardian Securities Ltd per McLelland J.[55]
(12)In the absence of such evidence, an extension should not be granted unless steps are taken to protect the interest of unsecured creditors: Re Guardian Securities Ltd per McLelland J.[56]
(13)If insufficient or no evidence of solvency is adduced, then either:
(i)one or more unsecured creditors might be joined as representative parties;
(ii)directions might be given as to notification of unsecured creditors of the application with a view to their being heard in opposition to it, if they so desired; or
(iii)the extension of time might be granted reserving, however, a right to the company or any unsecured creditor or any person representing the interests of unsecured creditors to apply at a later stage to discharge or vary the order: Re Cinema Art Films Ltd;[57] Re LH Charles & Co Ltd;[58] and Re Guardian Securities Ltd.[59]
[54](1935) WN (Eng) 15 (Re LH Charles).
[55][1984] 1 NSWLR 95, at 97.
[56]Ibid, 97.
[57][1930] NZLR 500, at 502–503 per Myers CJ.
[58](1935) WN (Eng) 15, at 16 per Clauson J.
[59][1984] 1 NSWLR 95, at 97–98 per McLelland J.
It remains the case that where an applicant is unable to demonstrate the grantor’s solvency and the likelihood of its solvency being maintained into the foreseeable future, steps will usually be taken to preserve the interests of unsecured creditors by reserving liberty to apply to any external administration appointed within six months of the date on which registration for the security interest is fixed.[60] Such orders have been granted even where administration or liquidation is in contemplation.[61]
[60]See, eg, Cardinia, at [20]; Re Appleyard, at [25]; Bluewaters, at [54].
[61]Bluewaters at [59].
In considering the potential impact to unsecured creditors attributable to the delay in registration, courts have considered whether there were any other registered AllPAP[62] securities which would have been apparent to an unsecured creditor searching the PPS Register. As Vaughan J observed in Bluewaters, where an earlier AllPAAP security has been registered, ‘[i]t is unlikely that any unsecured creditors would have dealt with the defendant company on the basis that the relevant collateral affected … was unencumbered’.[63]
[62]All present and after acquired property.
[63]Ibid, at [61]. See also Re Appleyard at [30].
In Re Accolade Wines,[64] Brereton J observed that the grant of relief will not likely affect any person adversely where the grantor is shown to be financially secure. His Honour also observed that if the Court is not satisfied that there is no risk that unsecured creditors could be adversely affected, a term reserving leave to apply to set it aside in the event of a liquidation or administration may be imposed.
[64]Re Accolade Wines, at [19].
Similarly, in Cardinia, after determining that the evidence as to the grantor’s financial position was incomplete, Black J made an order reserving the ability of a liquidator, administrator, deed administrator or other unsecured creditor to apply to discharge it within a six month period from the date of registration of the security interest in the collateral.[65]
[65][2013] NSWSC 32, at [24].
Discretionary factors
A delay in registering a security interest on the PPS Register will not prevent an order being made under section 588FM. The significance of the passage of time is related to the possibility of competing interests having arisen, particularly through others having dealt with the company on the footing that the company was unencumbered.[66] In Bluewaters, Vaughan J observed that:[67]
The significance of the passing of time is mainly related to the possibility that others will have dealt with the company on a basis that the collateral was unencumbered. For example, unsecured creditors may be detrimentally affected by the delay in registration if they traded with the company of [sic] the face of the register that showed no security interest.[68]
[66]Re Transurban, at [13] (Brereton J).
[67]Bluewaters, at [53].
[68]Re Appleyard, at [31].
As counsel for the plaintiff notes, there are a number of cases where orders have been made under s 588FM in circumstances where the delay has exceeded 12 months.[69] In Re Psyche Holdings Pty Limited,[70] Ward CJ in Eq granted relief under section 588FM, despite a five year delay between the date on which the registration of the security interest should have been made and the date on which the application was made. In Re Amotran Pty Ltd[71] a bank (being the successor in law to the original bankers) discovered almost five years after the general security agreement was executed that its registration on the PPS Register was defective (because the security interest had not been registered against the ABN of the trust). Additionally, it took another five months between the time the bank identified the defect and re-registering the security interest.
[69]In Re Amotran Pty Ltd [2017] VSC 637 at fn 31, Judd J observed that the delay in Re Appleyard was 15 months and in Northern Managed Finance Pty Ltd v 4in1 Wyoming Pty Ltd [2017] NSWSC 407, the delay was 15 months.
[70][2018] NSWSC 1254 (Re Psyche Holdings).
[71][2017] VSC 637 (Re Amotran).
As noted earlier, the potential prejudice to creditors and shareholders will also be a discretionary factor where an application for an extension under section 588FM is determined other than under section 588FM(2)(a)(ii).
Against that background, I turn to consider the plaintiff’s application for an extension of time.
Consideration of present application
Was the failure to register the collateral accidental and due to inadvertence?
The evidence given by Mr Azzopardi has been summarised above. I am satisfied that his failure to attend to registration of the plaintiff’s security within the prescribed period of 20 business days was an innocent oversight and one that did not result from any disregard of statutory obligations.
The observation of Vaughan J in Bluewaters, to the effect that the relevant concept of ‘inadvertence’ is one that is ‘concerned with oversight or being “not properly attentive”’,[72] is apt to describe the conduct of Mr Azzopardi in the present case. He was aware that the security interests needed to be registered on the PPS Register within 20 business days but due to oversight he failed to follow NRFA’s usual processes and prepare the financing statement checklist and secured party group for Austin Finance to enable the registrations to occur. Mr Azzopardi acknowledges that it is likely he was distracted by other matters relating to the Austin Finance transaction at the time, and also the fact that NRFA was acting for both the borrower and lender.[73] Further, he deposes that the period of two months that elapsed between the date of execution of the security documents for the Austin Finance transaction and the date on which they became operative (being the date on which the First Priority Deed was executed), also contributed to him ‘forgetting to procure the registration of the Austin Finance Security Interests on the PPS Register upon completion of the Austin Finance Transaction on 26 September 2019.’[74] He has deposed that this oversight has caused him great stress and regret.[75]
[72][2019] WASC 438, at [40].
[73]Azzopardi affidavit, [17].
[74]Azzopardi affidavit, [29].
[75]Azzopardi affidavit, [28].
Whether there is any prejudice to the position of creditors or shareholders
On 8 October 2020, NRFA sent letters to each of the defendants informing them of the background to and purpose of this proceeding and requesting that they provide the following financial information:[76]
(1)Have you granted any security interests to any other creditor during the period 16 October 2019 to 29 September 2020, including any interests which are not registered on the PPSR? If so, please provide details of those security interests, including the amounts secured by them.
(2)Has there been any material change in your company’s financial position between 16 October 2019 and the date of registration of the security interests on 29 September 2020?
(3)Have you incurred any debt of a material amount during the period 16 October 2019 to 29 September 2020? If so, please provide detail of those debts.
(4)Any other financial information or documentation which indicates the current profitability or otherwise of your company,
(referred to as the Financial Position Questions).
[76]Second Millar affidavit, [7].
Counsel for the plaintiff conveniently summarised the responses from the respective defendants outlining their respective financial position as follows:
Bellerine Heights
(a)Bellerine Heights is the development company undertaking the Ritz Development;[77]
[77]Second Millar affidavit, [9].
(b)in response to the Financial Position Questions, accountants acting for Bellerine Heights advised:[78]
[78]Second Millar affidavit, exhibit SWM-31.
(i)No security interest has been granted to any other creditor during the period 16 October 2019 to 28 September 2020.
(ii)No material change in the grantor’s financial position between 16 October 2019 and the date of registration of the security interests on 29 September 2020.
(iii)That the grantor has not incurred any debt of a material amount during the period 16 October 2019 to 29 September 2020.
(iv)Financial reports for the year ended 30 June 2020 are included. There have been major changes in the profit position of Bellarine [sic] Heights since its inception and that all costs of the Development have been capitalized.
(c)a number of pre-sale contracts for the Ritz Development have been entered into, but none had settled as at 30 June 2020 (being the date at which the Bellerine Heights financial reports exhibited at SWM-31 (Bellerine Heights Financial Report) related to);[79]
[79]Ibid,[11(a)].
(d)the deposits for those sales were recorded in the Bellerine Heights Financial Report as a liability on the basis that they would need to be refunded in the event the sale transactions did not settle;[80]
[80]Ibid, [11(d)].
(e)the Ritz Development is near to being complete;[81] and
[81]Ibid, [13].
(f)the Bellerine Heights Financial Report is of limited utility to understand the financial position of Bellerine Heights as it does not identify the value of sales or profit from the Ritz Development.[82]
[82]Ibid, [11(a)].
Bell Heights
(a)Bell Heights is the management company for the hotel forming part of the Ritz Development;[83]
[83]Ibid, [14].
(b)in response to the Financial Position Questions, accountants acting for Bell Heights advised:[84]
[84]Second Millar affidavit, exhibit SWM-33 (emphasis in original).
(i)No security interest has been granted to any other creditor during the period 16 October 2019 to 28 September 2020.
(ii)No material change in the grantor’s financial position between 16 October 2019 and the date of registration of the security interests on 29 September 2020.
(iii)That the grantor has not incurred any debt of a material amount during the period 16 October 2019 to 29 September 2020.
(iv)We enclose financial reports for the year ended 30 June 2020. Note that both entities have minimal activities in them at this point in time and will not until the completion of the “Ritz Geelong” property development;
(c)although Bell Heights appears to have made a loss the last two financial years and has a deficiency of assets, the unaudited financial report for Bell Heights for the year ended 30 June 2020 (Bell Heights Financial Report) contains the following note:[85]
[85]Second Millar affidavit, confidential exhibit SWM-32, at Note 1 (d).
Notwithstanding the deficiency of net assets in the company, the financial statements of the company have been prepared on a going concern basis. This basis has been applied as the directors have received a guarantee of continuing financial support and it is the directors’ belief that such financial support will continue to be made available.
The deficiency of net assets is due to the accumulation of operating costs during the construction phase of the development. The costs are funded by the unitholders and the development trust until completion of the project.
(d)as at 30 June 2020, Bell Heights had no current liabilities.[86]
[86]Bell Heights Financial Reports, Statement of Financial Position at confidential exhibit SWM-32.
Bell-East
(a)Bell-East is an investment vehicle;[87]
[87]Second Millar affidavit, [18(c)].
(b)in response to the Financial Position Questions, accountants acting for Bell-East advised:[88]
[88]Second Millar affidavit, exhibit SWM-33 (emphasis in original).
(i)No security interest has been granted to any other creditor during the period 16 October 2019 to 28 September 2020.
(ii)No material change in the grantor’s financial position between 16 October 2019 and the date of registration of the security interests on 29 September 2020.
(iii)That the grantor has not incurred any debt of a material amount during the period 16 October 2019 to 29 September 2020.
(iv)We enclose financial reports for the year ended 30 June 2020. Note that both entities have minimal activities in them at this point in time and will not until the completion of the “Ritz Geelong” property development;
(c)although Bell-East made a loss in the financial years ending 30 June 2019 and 30 June 2020, as at 30 June 2020, Bell-East’s total current assets ($[redacted]) vastly exceeded its total current liabilities ($[redacted]) and it had a net asset position of $[redacted];[89] and
[89]Bell Heights Financial Reports, Statement of Financial Position at confidential exhibit SWM-34.
(d)the directors of Bell-East have signed a declaration at page 7 of the Bell-East Financial Report that, in their opinion, there are reasonable grounds to believe that the Bell-East Property Trust will be able to pay its debts as and when they become due and payable.[90]
[90]Bell Heights Financial Reports, Directors’ Declaration of the Trustee Company at SWM-34.
Bayview Geelong
(a)Bayview Geelong is the trustee of the Bayview Geelong Unit Trust and does not appear to be a trading entity;[91]
[91]Second Millar affidavit, [21(a)].
(b)in response to the Financial Position Questions, Mr Rick Henery, a director of Bayview Geelong advised that the answer to the first three questions is ‘No’ and, in response to question 4, he provided copies of draft financial statements for the financial year ending 30 June 2020 (Bayview Geelong Draft Financial Statements);[92]
[92]Email from Rick Henery dated 9 October 2020, second Millar affidavit, at exhibit SWM-36.
(c)the Bayview Geelong Draft Financial Statements indicate that although Bayview Geelong made a small loss in the financial years ending 30 June 2019 ($[redacted]) and 30 June 2020 ($[redacted]), as at 30 June 2020, Bayview Geelong’s total current assets ($[redacted]) vastly exceed its total liabilities ($[redacted]) and it had a net asset position of $[ redacted].[93]
Moorabool
(a)In response to the Financial Position Questions, Mr Bruce Roberts, a director of Moorabool, sent an email to NRFA advising:[94]
(i)there has not been any security interest granted to any other creditor during the period referred to;
(i)there has not been any material change in Bellerine Ritz Unit Trust Financial position during the dates referred to;
(ii)Moorabool Partners Pty Ltd ATF Bellerine Ritz Unit Trust has not incurred any debt of a material amount during the period referred to; and
(iii)there is not any other financial information or documentation that has impacted the current financial position or profitability of Moorabool Partners Pty Ltd ATF the Bellerine Ritz Unit Trust.
[93]Bayview Geelong Draft Financial Statements, second Millar affidavit, at confidential exhibit SWM‑35.
[94]Second Millar affidavit, at exhibit SWM-37.
Ritz Geelong
(a)Ritz Geelong is the trustee of the Ritz Geelong Unit Trust and is not a trading entity;[95]
(b)it was established as an investment vehicle for the Ritz Development;[96]
(c)in response to the Financial Position Questions, Mr Bobby Brooks, a former company secretary of Ritz Geelong with authority to respond on its behalf,56 advised that the answer to the first three questions is ‘No’ and, in response to question 4, he provided copies of draft financial statements for the financial year ending 30 June 2020 (Ritz Geelong Draft Financial Statements);[97]
(d)the Ritz Geelong Draft Financial Statements indicate that although Ritz Geelong made a small loss in the financial years ending 30 June 2019 ($[redacted]) and 30 June 2020 ($[redacted]), as at 30 June 2020, Ritz Geelong’s total assets ($[redacted]) vastly exceed its total liabilities ($[redacted]) and it had a net asset position of $[redacted].[98]
[95]See email from Bobby Brooks to Scott Millar dated 21 October 2020, second Millar affidavit, at exhibit SWM-38.
[96]Ibid.
[97]Emails from Bobby Brooks to Scott Millar dated 21 October 2020, second Millar affidavit, at exhibits SWM-38 and SWM-39.
[98]Ritz Geelong Draft Financial Statements at confidential exhibit SWM-40.
Against that background, counsel for the plaintiff submitted that there is no evidence to suggest that any of the defendants is in financial difficulty or that an external controller is likely to be appointed. Further, she noted that as The Ritz development is within weeks of completion and the majority of the apartments in the complex have been sold for a total purchase price in excess of $[ redacted],[99] Bellerine Heights is about to receive a very significant cash injection.[100]
[99]Third Millar affidavit, [30(a)].
[100]The evidence is that the apartments are expected to settle within months: third Millar affidavit, [28)].
Insofar as the secured creditors are concerned, it is clear that they will not be affected by any order made under section 588FM. As was noted in the introduction, the priority interests of Monark, the plaintiff and Ritz Furniture are regulated by the Priority Deed and it is apparent from that both Monark and Ritz Furniture were aware of, and consented to, the plaintiff’s security interests in respect of the defendants.
In the case of the unsecured creditors, however, the courts have recognised the potential for any delay in registration to impact on unsecured creditors who may have dealt with the company on the basis that its assets were unencumbered.
Counsel for the plaintiff submitted that in the present case, in circumstances where, prior to entry into the Austin Finance transaction, each of Bellerine Heights and Bell Heights had granted general security interests over all of their present and after acquired property for the benefit of Monark and ‘‘AllPAAP’ securities had been registered, any unsecured creditors who transacted with either Bellerine Heights or Bell Heights during the 12 months prior to the date of registration of the Austin Finance security interests would have been able to ascertain from a search of the PPS Register that those companies had granted general security interests. Counsel acknowledged, however, that based on a review of a PPS Register searches there is no real way of knowing the extent of any encumbrances.[101]
[101]Transcript, 07.12.2020, at pp 23.03-23.05.
Similarly, in the case of the Grantors, counsel submitted that none of them appear to be trading entities and any unsecured creditor would have been able to ascertain from the PPS Register that they had granted specific security interests over their units in the BHD Trust for the benefit of Monark. Accordingly, counsel submitted, the potential for unsecured creditors to have been impacted by the plaintiff’s delay in registering its interests on the PPS Register is significantly diminished.
In the present case, the evidence as to solvency falls short of presenting a compelling case. The responses received from the respective defendants outlining their respective financial position (as set out above) have been presented through Mr Millar, in a summary way and effectively on information and belief. To the extent that accounts or financial reports pertaining to the various entities are relied upon, they are unaudited and presented as at 30 June 2020. In the case of Bell Heights, while it has made a small financial loss over the past two years and there is a deficiency of net assets due to the accumulation of operating costs during the construction phase of the development, no details are given about the ‘guarantee of continuing financial support’ referred to by the directors or the reasons why they believe such financial support will continue to be made available. And, as Mr Millar noted, the financial report for Bellerine Heights is ultimately of limited utility to understand the financial position of the company because it does not identify the value of the sales that have taken place and the settlements that are likely to occur in January 2021.
Further, in circumstances where Victoria was placed in ‘Stage 2 lockdown’ due to COVID-19 post 30 June 2020, it is unclear whether COVID-19 circumstances are likely to have had any, and if so what, impact upon the post 30 June 2020 position of any of the companies. In that regard, however, I note that the recent ASIC searches and PPS Register searches exhibited to Ms Mortimer’s affidavit do not suggest any recent activity of concern for any of the companies.[102]
[102]Counsel for the plaintiff submitted that ‘[t]here’s certainly no suggestion that Bellerine Heights is in financial difficulty or that any external controller is likely to be appointed’(Transcript, 07.12.2020, at pp 17.22-17.24) and ‘the highest I can put it is that there’s no evidence to suggest that any of the defendants are in financial difficulty, or that there’s … any suggestion of any imminent appointment of an external controller’ (Transcript, 07.12.2020, at pp 19.15-19.19).
Ordinarily, where the Court cannot be satisfied that there is no risk that unsecured creditors could be adversely affected, they are entitled to be heard against the making of the order. But where that is not practicable, the courts have accepted that may be sufficiently achieved, depending on the degree of risk involved, by suspending the operation of the order or imposing a term reserving leave to apply to set it aside in the event of a liquidation or administration.[103]
[103]See for e.g., Re Appleyard, at [25].
In my view, given the status of the solvency information adduced in support of the application, one cannot be satisfied that there is no risk that unsecured creditors could be adversely affected by the making of an order extending the time for registration. In those circumstances, given the absence of any contradictor, it is appropriate for the Court to impose a term reserving leave to unsecured creditors and any liquidator or administrator to apply to set aside the order for extension of the date for registration in the event of a liquidation or administration.
Conclusion
For the foregoing reasons, I am satisfied that the failure to register the collateral pertaining to the Austin Finance transaction was accidental or due to inadvertence. I am also of the view that while it seems unlikely that an extension of the time for registration will prejudice the position of creditors, it is nevertheless appropriate in the circumstances to impose a term reserving leave to unsecured creditors and any liquidator or administrator to apply to set aside the order extending the time for registration in the event of a liquidation or insolvency.
I propose to make orders along the following lines:
1.Pursuant to section 588FM(1) of the Corporations Act 2001 (Cth) (Corporations Act), 29 September 2020 be fixed as the later time for the plaintiff to register financing statements on the Personal Property Securities Register for the purposes of section 588FL(2)(b)(iv) of the Corporations Act with the following registration numbers:
(a)202009290034368 and 202009290034427 in respect of the First Defendant;
(b)202009290034254 and 202009290034462 in respect of the Second Defendant;
(c)202009290037335 and 202009290037374 in respect of the Third Defendant;
(d)202009290037342 and 202009290037390 in respect of the Fourth Defendant;
(e)202009290037357 and 202009290037405 in respect of the Fifth Defendant; and
(f)202009290037361 and 202009290037422 in respect of the Sixth Defendant.
2.In the event that within six months after 29 September 2020, a winding up of a defendant commences or an administrator of a defendant is appointed under s 436A, 436B or 436C of the Corporations Act or a defendant executes a deed of company arrangement, the liquidator, administrator, deed administrator and any unsecured creditor of the defendant has liberty to apply to discharge or vary the order made in paragraph 1 above.
I will hear from the parties on the final form of the orders to be made.
Annexure A: Summary of relationships between the parties
Key. D = Director. Sec = Secretary. SH = Shareholder. + = among others not listed in table.
| Trustee | Trust | Gerard Witts | Glen Brooks | Bruce Roberts | Philip Petch | Unitholder in BHD Trust | Security granted to Monark Finance Dev 53 Pty Ltd | Security granted to Austin | Security granted to Ritz Furniture Pty Ltd |
| P: Austin Finance Pty Ltd (Austin) | Austin Finance Unit Trust | D, Sec, SH | D, SH | D, SH | D, SH | N | Y | Y | Y |
| D1: Bellerine Heights Pty Ltd | Bellerine Heights Development Trust (BHD Trust) | D, Sec, SH | D, SH | D, SH | D, SH | N | Y | Y | N |
| D2: Bell Heights Management Pty Ltd | Bell Heights Management Trust | D, Sec, SH | D, SH | D, SH | D, SH | N | Y | Y | N |
| D3: Bayview Geelong Pty Ltd | Bayview Geelong Unit Trust | - | - | - | D+, Sec, SH | Y | Y | Y | N |
| D4: Bell-East Property Pty Ltd | Bell-East Property Trust | D+, S+, SH+ | - | - | - | Y | Y | Y | N |
| D5: Moorabool Partners Pty Ltd | Bellerine Ritz Unit Trust | - | - | D+, SH+, Sec | - | Y | Y | Y | N |
| D6: Ritz Geelong Pty Ltd | Ritz Geelong Unit Trust | - | Former D and Sec | - | - | Y | Y | Y | N |
SCHEDULE OF PARTIES
AUSTIN FINANCE PTY LTD (ACN 632 635 771) in its own capacity and as trustee for the AUSTIN FINANCE UNIT TRUST (ABN 33 253 937 970) Plaintiff - and - BELLERINE HEIGHTS PTY LTD (ACN 615 582 968) in its own capacity and as trustee for the BELLERINE HEIGHTS DEVELOPMENT TRUST (ABN 38 756008 210) First defendant BELL HEIGHTS MANAGEMENT PTY LTD (ACN 617 373 341) in its own capacity and as trustee for the BELL HEIGHTS MANAGEMENT TRUST (ABN 28 760 589 788) Second defendant BAYVIEW GEELONG PTY LTD (ACN 615 893 117) in its own capacity and as trustee for the BAYVIEW GEELONG UNIT TRUST Third defendant BELL-EAST PROPERTY PTY LTD (ACN 615 583 590) in its own capacity and as trustee for the BELL-EAST PROPERTY TRUST (ABN 79 501 996 556) Fourth defendant MOORABOOL PARTNERS PTY LTD (ACN 169 635 349) in its own capacity and as trustee for the BELLERINE RITZ UNIT TRUST (ABN 99 525 784 014) Fifth defendant RITZ GEELONG PTY LTD (ACN 615 909 754) in its own capacity and as trustee for the RITZ GEELONG UNIT TRUST (ABN 25 780 065 351) Sixth defendant
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