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Re Black Opal IP Pty Ltd

Re Black Opal IP Pty Ltd

Case [2013] NSWSC 1225 22 July 2013

Administrator

Deed of Company Arrangement

Unregistered Security Interests

Statutory Construction

Insolvency Law

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Black Opal IP Pty Limited ACN 151 765 356 (subject to Deed Of Company Arrangement) [2013] NSWSC 1225
Hearing dates: Monday 22 July 2013
Decision date: 22 July 2013
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Registration date for security interest scheduled

Catchwords: CORPORATIONS - external administration - deed of company arrangement - administrator seeking extension of time to register security interests - where interest has remained unregistered for significant period of time - where no competing interests have been registered - whether court should exercise discretion to extend time
Legislation Cited: (Cth) Personal Property Securities Act 2009
(Cth) Corporations Act 2001, s 588FL, s 588FM
Cases Cited: In the Matter of Cardinia Nominees Pty Ltd [2013] NSWSC 32
Re Barclays Bank PLC [2012] NSWSC 1095
Investa Properties Pty Limited v Westpac Property Funds Management Limited [2001] NSWSC 1089
Category: Principal judgment
Parties: Mark Cooper in his capacity as deed administrator of Black Opal IP Pty Limited (subject to deed of company arrangement) (first plaintiff)
Black Opal IP Pty Limited (A.C.N. 151 765 356) (Subject to deed company arrangement) (second plaintiff)
Integra Foods Pty Ltd (A.C.N. 003 234 580) (defendant)
Representation: Counsel:
Mr RW Notley (plaintiffs)
Solicitors:
ERA legal (plaintiffs)

File Number(s): 2013/ 206432

Judgment (Ex TemporE)

HIS HONOUR: By originating process filed on 8 July 2013, the first plaintiff Mark Cooper in his capacity as deed administrator of the second plaintiff Black Opal IP Pty Ltd claim an order pursuant to (Cth) Corporations Act 2001, s 588FM(1), fixing 28 June 2013 as the registration date for security interests granted to the first plaintiff in certain collateral, being present and after acquired property referred to in registration number 201306280118649 in the register established under the (Cth) Personal Property Securities Act 2009.

Mr Cooper is the administrator of a deed of company arrangement dated 8 June 2012 in respect of Black Opal. Under the DOCA, a deed fund was to be established into which was to be paid moneys falling due for payment under an asset sale agreement between Black Opal and Mr Cooper as vendors and the defendant Integra Foods Pty Limited as purchaser. On 22 June 2012, Mr Cooper, Black Opal and Integra entered into an asset sale deed, by which Integra was obliged to pay $44,000 to Black Opal on 29 June 2012, followed by a number of monthly instalments, with property to pass until the purchase price was paid in full and Integra's other obligations as purchaser complied with.

Integra was required to execute a general security agreement to secure its obligations to Mr Cooper. Pursuant to that obligation, Integra, also on 22 June 2012, granted Mr Cooper a security interest in all its present and after acquired property pursuant to a "general security agreement". However, Mr Cooper's solicitor, although instructed to take all steps to ensure that the general security agreement was registered and enforceable, did not do so. The evidence…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Black Opal IP Pty Ltd

Details

AGLC: Re Black Opal IP Pty Ltd (subject to Deed Of Company Arrangement) [2013] NSWSC 1225
Case: [2013] NSWSC 1225
Decision Date: 22 July 2013

CaseChat Overview and Summary

The case before the court involved an application by the administrator of a company, Black Opal IP Pty Ltd, to extend the time to register security interests. The company had entered into a deed of company arrangement, and the administrator sought to secure the company's assets to ensure the success of the arrangement. However, some security interests had not been registered within the required timeframe, leading to the application for an extension. The primary legal issue was whether the court should exercise its discretion to allow the late registration of the security interests.

The court considered whether the delay in registering the security interests was unreasonable and whether there were any competing interests that could be prejudiced by the late registration. The administrator argued that the delay was due to administrative oversight and that no competing interests had been registered during the period of delay. The court acknowledged that while the delay was not insubstantial, there were no competing interests to be prejudiced, and the delay was not due to any fault on the part of the company or the administrator. The court further noted that allowing the late registration would not undermine the purpose of the registration requirement, which is to provide notice to third parties.

After considering the arguments and the circumstances of the case, the court exercised its discretion to permit the late registration of the security interests. The court found that the delay was not insubstantial but was not so significant as to warrant refusing the application. The court was satisfied that the delay was not due to any fault on the part of the company or the administrator and that there were no competing interests that could be prejudiced by the late registration. The court concluded that allowing the late registration would not undermine the purpose of the registration requirement and that it was in the best interests of the company and its creditors to permit the registration. The court granted the application, and the security interests were registered.

Orders