PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)

SAM ANDREW MARSDEN in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)

DERRICK CRAIG VICKERS in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)

BETWEEN : PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)

SAM ANDREW MARSDEN in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)

DERRICK CRAIG VICKERS in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)

BRYAN KEVIN HUGHES and DANIEL JOHANNES BREDENKAMP as joint and several receivers and managers of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : PLUTON RESOURCES LTD (RECEIVERS & MANAGERS APPOINTED (IN LIQ) [2017] WASC 142

Corporations - Termination of deed of company arrangement - Company put into liquidation - Claim on funds remaining in company after termination of deed of company arrangement - Whether secured creditor had security interest in funds - Whether funds available to secured creditor or available to liquidator in winding up - Application of Personal Property Securities Act 2009 (Cth)

Personal Property Securities Act 2009 (Cth), s 8(1)(b), s 10, s 12(1), s 18, s 19, s 20, s 21, s 153, s 267

Allmark v Mossensons (a firm) [2006] WASCA 127

Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd [2015] WASCA 95; (2015) 197 FLR 1

Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd [2014] VSCA 326; (2014) 49 VR 86

Pluton Resources Ltd (Receivers & Managers Appointed) (in liq) [2017] WASC 142

Ziziphus Pty Ltd v Pluton Resources Limited (Receivers and Managers Appointed) (Subject to Deed of Company Arrangement) [2016] WASC 276

1 There are two appeals against Master Sanderson's decision in Pluton Resources Ltd (Receivers & Managers Appointed) (in liq)[1] (primary decision).

2 The primary decision dealt with two matters. The first concerned an application by Mr Marsden and Mr Vickers in their capacities as joint and several liquidators of Pluton Resources Ltd (Receivers & Managers Appointed) (in liquidation) (Pluton) (liquidators) for orders under s 511(1) of the Corporations Act 2001 (Cth) concerning the entitlement to and distribution of the balance of certain funds paid to Pluton under a deed of company arrangement, which had subsequently been terminated. The liquidators sought orders to the effect that the funds remaining in Pluton after the termination of the deed of company arrangement were held by the liquidators in Pluton's liquidation, and were to be paid out in accordance with s 556 of the Corporations Act. The application was contested by the receivers and managers of Pluton (receivers) appointed by a secured creditor of Pluton, General Nice Recursos Comercial Offshore De Macau Limitada (GNR). The receivers, who had a competing application to this effect, contended that the remaining funds in Pluton were subject to GNR's security interest. The master upheld the liquidators' application and dismissed the receivers' application. The receivers appeal against that aspect of the master's decision. The liquidators contest that appeal.

3 The second matter concerned an application by the liquidators for an order to the effect that the liquidators were entitled to pay out of the funds in Pluton the costs incurred by them (ie, Mr Marsden and Mr Vickers) in their capacities as the former Deed Administrators in administering the funds. The master dismissed that application. The liquidators appeal that aspect of the master's decision. The receivers do not contest that appeal. Counsel for the liquidators accepted that if the receivers were to succeed in their appeal, this appeal falls away.[2]

4 There was no dispute in the primary proceedings or in the appeals that the funds in question were the property of Pluton, and that the liquidators have no lien over the funds.[3]

5 For the reasons which follow, the receivers' appeal should be allowed and the liquidators' appeal should be dismissed.

6 In April 2013, Pluton borrowed an amount of approximately $28.5 million from GNR. Pluton and GNR entered a Security Deed in respect of the amounts owing under the loan, and GNR registered its security on the Personal Property Securities Register. GNR is known as an 'all PAP no exception security holder', in that the security provided covers all 'property, rights and undertakings' of Pluton, whether present or future, whether real or personal property, whether tangible or intangible, and no matter where located.[5] Registration occurred on 2 May 2013.[6]

7 On 8 September 2015, pursuant to the terms of the Security Deed, GNR appointed the receivers as receivers and managers of Pluton. Mr Freeman and Mr Smith were also appointed on this date as joint and several administrators of Pluton.[7]

8 On 5 October 2015, following a first meeting of creditors, Mr Marsden and Mr Vickers were appointed as joint and several voluntary administrators of Pluton, replacing Mr Freeman and Mr Smith.[8]

9 On 9 December 2015, a second meeting of creditors was held, and the creditors resolved to 'execute a deed of company arrangement in terms specified in the statement accompanying the notice of meeting'.[9] World Systems Capital Investment Ltd (BVI) (World Systems Capital) was the deed proponent and a related entity of GNR.[10]

10 On 4 January 2016, Pluton entered into a deed of company arrangement. The parties to the deed were World Systems Capital, Mr Marsden and Mr Vickers on their own behalf and as administrators of Pluton, and a creditor, Watpac Ltd (Watpac).[11]

11 On 23 May 2016, a variation to the deed of company arrangement was voted on by creditors. The variation was approved, subject to an additional balance of $3.5 million being paid by World Systems Capital.

12 By 26 May 2016, the full amount of $3.5 million had been paid, and on 20 July 2016 the deed of company arrangement, as varied, (the DOCA) was executed by all parties.[12]

13 Under cl 13.1 of the DOCA, World Systems Capital, before execution, was to pay the sum of $1.5 million to the administrators on a non-refundable basis for the purpose of paying the 'Admitted Claims of the Participating Creditors' in the order of priority specified in s 444DA, s 556, s 560 and s 561 of the Corporations Act. In addition, World Systems Capital was to pay the sum of $2 million to Pluton. In respect of this $2 million, Pluton was to pay $1 million of those funds to the 'Former Receivership Creditors' on a non-refundable basis, and the other $1 million to Watpac on a non-refundable basis. Taken together, these payments (totalling $3.5 million) were defined as the 'First Deed Payment'.[13]

14 As at 21 July 2016, when the DOCA was terminated, an amount of $835,021.94 (the Fund) remained to be distributed in respect of the First Deed Payment. The sums of $1 million had each been paid to the 'Former Receivership Creditors' and to Watpac. The Fund was left after payment of the 'Admitted Claims of the Participating Creditors'.[14]

15 Clause 21 of the DOCA deals with 'termination of the deed'. Clause 21.5(b) includes, relevantly:[15]

On the termination of this Deed other than in accordance with clause 21.4, the Available Property will not be available to the Administrators' in respect of the Administrators' Costs, Expenses and Remuneration and will not be available for distribution to Creditors in any subsequent winding-up, administration or deed of company arrangement in respect of [Pluton].

16 The DOCA was not terminated in accordance with cl 21.4.

17 On 8 November 2016, Mr Marsden and Mr Vickers filed, in their capacities as liquidators of Pluton, an originating process, seeking orders including:[16]

1. A declaration and determination under section 511 of the [Corporations] Act that:

1. the funds currently held by the Liquidators comprising the First Deed Payment under the Deed of Company Arrangement dated 20 July 2016 (DOCA) (as that term 'First Deed Payment' is defined in clause 1.1 of the DOCA) which was set aside by order of this Honourable Court dated 21 July 2016 (Fund) are monies of [Pluton] held by the Liquidators in ... Pluton's liquidation and to be paid out in accordance with section 556 of the [Corporations] Act; 2. the Liquidators are entitled to pay out of the Fund the costs incurred by [Mr Marsden and Mr Vickers] in their capacities as the former Deed Administrators in administering the Fund;

1. the Liquidators have acted and will be acting justifiably in rejecting Pluton's Receivers and Managers, [GNR] and World Systems Capital ... claims to the Fund and that they have no entitlement to or security over or in respect of the Fund.

18 On 28 March 2017, the receivers filed an interlocutory process, seeking the following orders:[17]

1. A declaration and determination under section 424 of the [Corporations] Act that:

(a) the funds currently held by the liquidators of [Pluton] (Liquidators) comprising the First Deed Payment under the Deed of Company Arrangement dated 20 July 2016 (DOCA) (as that term 'First Deed Payment' is defined in clause 1.1 of the DOCA) which was set aside by order of this Court dated 21 July 2016 (Fund) are property to which the security interest created by the General Security Deed between [Pluton] and [GNR] dated 29 April 2013 (Security Deed) attaches;

(b) GNR's security interest in the Fund created by the Security Deed is perfected and enforceable for the purposes of the Personal Property Securities Act 2009; and

(c) the Receivers, having been appointed by GNR under the Security Deed, are entitled to immediately take possession of the Fund as receivers and managers of the property of [Pluton].

1. Alternatively, a declaration and determination under section 424 of the Act that:

(a) the Fund is property that is subject to a charge created by the Security Deed in favour of GNR to which the Personal Property Securities Act 2009 does not apply;

(b) the charge against the Fund is enforceable; and

(c) the Receivers are entitled to immediately take possession of the Fund as receivers and managers of the property of [Pluton].

19 The liquidators contended, relevantly in effect, that the Fund was not subject to the Security Deed and should be paid out in accordance with s 556 of the Corporations Act.

20 The receivers, on the other hand, asserted, in effect, that GNR had a security interest in the Fund, enforceable under the Personal Property Securities Act 2009 (Cth) (PPSA). Alternatively, they contended that the Fund was subject to a charge created by the Security Deed, to which the PPSA does not apply.

21 The liquidators raised three points in opposition to GNR's claimed entitlement to the Fund.

22 First, the liquidators said that as World Systems Capital is a subsidiary of GNR, to allow GNR to recover the Fund when the moneys were said by cl 13.1 of the DOCA to be, in effect, 'irrecoverable', would be improper. The master, however, said that there was no substance to this argument as it requires GNR and World Systems Capital to be treated effectively as the same entity, which they are not.[18]

23 Secondly, the liquidators said it would be contrary to public policy to allow GNR to recover the Fund, when the moneys contributed by World Systems Capital were said by cl 13.1 of the DOCA to be, in effect, 'irrecoverable'. The master said that this argument appeals to vague notions of unfairness, and could be put to one side.[19]

24 Thirdly, the liquidators said that the Security Deed, 'as it is effected by the [PPSA], does not capture the Fund'.[20] The liquidators advanced six inter-related grounds in support of this position. They were to the following effect:

1. Section 444D and s 444G of the Corporations Act give binding force to a deed of company arrangement over all creditors, and s 444D(1) applies not just to unsecured creditors but also to secured creditors.[21]
2. Clause 13.1 of the DOCA deals with how the DOCA funds contributed by World Systems Capital were to be distributed, and none were to be disbursed to GNR.[22]
3. The Fund was 'created, arose or [was] provided for under a law of the Commonwealth' and, therefore, pursuant to s 8(1)(b) of the PPSA, the PPSA did not apply, and the Fund was not captured by the Security Deed.[23]
4. The Fund is not subject to a security interest under s 12 of the PPSA.[24]
5. The DOCA did not mandate that any DOCA funds which might be retained by Pluton would be distributed to GNR as a Secured Creditor.[25]
6. Deed of company arrangement funds captured by a PPSA security interest or a fixed or floating charge would see a deed of company arrangement proposal never being able to be given effect to, because deed of company arrangement funds could be swept away by a secured creditor as soon as they were paid by a proponent.[26]

25 The master, in effect, rejected the first, second, fifth and sixth of these grounds,[27] but upheld the third and fourth grounds.

26 In relation to the third ground, the master said that it was necessary to consider the nature of a deed of company arrangement and referred in this regard to Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd.[28] The master explained that a deed of company arrangement is a creature of statute and, in accordance with div 10 of pt 5.3A of the Corporations Act, the idea of a deed of company arrangement is to allow the creditors to effectively resolve by majority what to do with the insolvent company between themselves. On this basis, the master said that the Fund is not a security interest and is not the subject of the Security Deed. He said that a disgruntled creditor who does not have the support of the majority of the creditors by number and by value is coerced into accepting a deed of company arrangement, and that clearly the Fund created as a consequence of the DOCA is provided for under the law of the Commonwealth.[29]

27 The master said that it does not matter that, as here, the DOCA terminates. He said that upon termination, the character of the Fund does not change, and the Fund, although it may be available for distribution other than in accordance with the terms of the DOCA, was still 'created' by the Commonwealth law.[30]

28 In relation to the fourth ground, with its focus on s 12 of the PPSA, the liquidators relied on Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd.[31] The master said that the following three points could be summarised from Santamaria JA's judgment in that case:[32]

1. under s 12 of the PPSA, to be a 'security interest' the interest must arise out of a transaction;
2. the PPSA does not define the word 'transaction', and the word must therefore be given its 'natural and ordinary' meaning; and
3. the exclusion from the application of the PPSA, by operation of s 8, of interests in personal property which arise by operation of law, notwithstanding they may be said to arise from transactions (using that term in its broadest possible sense), strongly suggests that the use of the term 'transaction' in s 12 is confined to consensual transactions inter partes.

29 The master said that the question in the present case was whether or not the Fund arose as a result of a consensual transaction. The master concluded that the Fund was not a consensual transaction. He said that it 'is an arrangement which draws upon the law to achieve a certain result - a result that can only be achieved by meeting the terms of the DOCA'. Accordingly, he said, in effect, that the Fund is not a security interest against which GNR has rights.[33]

30 The master then turned to the question of 'whether or not the liquidators while they were administrators of the DOCA [were] entitled to payment of their fees out of the Fund'.[34] As to this, the master found that by virtue of cl 21.5(b) of the DOCA, the liquidators were not so entitled.

31 The master accordingly made orders in terms of pars 1(a) and 1(c), but not par (b), of the application by Mr Marsden and Mr Vickers, referred to in [17] above. The master also dismissed the receivers' application.

32 The receivers' appeal contains three grounds of appeal to the following effect:

1. The master erred in law in misapplying s 8(1)(b) of the PPSA to the facts in holding that GNR's security did not attach to the Fund because the funds were created, arose or were provided for under a law of the Commonwealth, such that the Fund is not a security interest and is not the subject of GNR's security.
2. The master erred in law in misapplying s 12 of the PPSA to the facts in holding that GNR's security did not attach to the Fund because the Fund established pursuant to the DOCA was not a consensual transaction and thus the Fund was not a security interest.
3. Alternatively to grounds 1 and 2, the master erred in law by failing to consider and decide whether the Fund was subject to a fixed charge created by cl 2.2(a)(ii) of the Security Deed.

33 The liquidators' appeal alleges, in effect, that the master erred in failing to make a declaration in terms of order 1(b), sought in the liquidators' originating process.[35] It is alleged, in effect, that the master erred in his construction and application of cl 21.5(b) of the DOCA.

34 The relevant provisions of the PPSA and the regulations made under it are set out in the schedule to these reasons.

35 The Security Deed, executed on 29 April 2013, included the following provisions.

• Loan Agreement means the loan agreement dated on or about the date of this Deed between the Grantor [that is, Pluton] and the Secured Party [that is, GNR].
• Secured Money means all money, obligations and liabilities of any kind that are or may in the future become due, owing or payable, whether actually, contingently or prospectively, by the Grantor to or for the account of the Secured Party under or in relation to a Transaction Document ...
• Secured Party's Security Interest means the Security Interest held by the Secured Party under the terms of clause 2.2 of this Deed.
• Secured Property means all of the property, rights and undertaking of the Grantor irrespective of:

(a) whether it is present or future;

(b) whether it is real or personal;

(c) whether it is tangible or intangible; and

(d) where it is located,

including ... PPSA Retention of Title Property and Trust Property.

• Security means this Deed, and each other Guarantee, Security Interest or other document entered into by any person to secure or assume responsibility for the payment, repayment or satisfaction of the Secured Money or any part of it.
• Security Interest means a right, interest, power or arrangement in relation to any property which provides security for, or protects against default by a person in, the payment or satisfaction of a debt, obligation or liability and includes:

(a) a mortgage, charge, bill of sale, pledge, deposit, lien, encumbrance, hypothecation or other security interest (including a 'security interest' as defined in section 12 of the PPSA);

(b) any other arrangement having the effect of conferring security (including any arrangement for the retention of title); or

(c) any contractual arrangement under which money or claims to, or the benefit of, a bank or other account may be applied, set-off or made subject to a combination of accounts.

(a) this Deed;

...

(c) the Loan Agreement.

37 Clause 2 of the Security Deed provides, relevantly:

(a) As security for the due and punctual payment and satisfaction of the Secured Money, the Grantor grants to the Secured Party:

(i) a Security Interest in all and any Secured Property to which the PPSA applies; and

(ii) a fixed charge over all and any Secured Property to which the PPSA does not apply.

(b) Without limiting the effect of subclause 2.2(a)(ii)) [sic], if the charge created under sub-clause 2.2(a)(ii) is not legally and fully effective as a fixed charge for any reason, then to the extent it may not be so legally and fully effective, that charge is a floating charge until such time as it becomes a fixed charge, including under clause 2.9.

(c) For the purposes of sub-section 20(2)(b) of the PPSA, the parties intend that the security interest granted under this Deed is a Security Interest in all of the Grantor's present and after acquired property.

The Grantor enters into this Deed for valuable consideration from the Secured Party and acknowledges receipt of that consideration.

the following Claims by the Participating Creditors:

(a) in respect of the payment of the Former Receivership Creditors, the amounts specified in Schedule 1; and

(b) in respect of the Participating Creditors (other than the former Receivership Creditors) the Claims that are admitted to proof by the Administrators in accordance with the terms of this Deed or the Trustee in accordance with the Creditors' Trust Deed, as the context requires.

For the avoidance of any doubt, any Claim by a Creditor who is not a Participating Creditor will not be an Admitted Claim.

40 'Admitted Creditor' is defined to mean 'a Participating Creditor who has an Admitted Claim'.

41 'Available Property' is defined to mean the First Deed Payment and the Second Deed Payment.

42 'Completion' is defined to mean the performance of the transactions contemplated by cl 14. The term 'Completion Date' means the day which is five Business Days after the date of the satisfaction or waiver, as the case may be, of the last of the Conditions Precedent, or such later date as is agreed in writing between the Administrators and Proponent.

43 'Deed Payments' is defined to mean the First Deed Payment and the Second Deed Payment.

44 'Effectuation' means the effectuation of the DOCA in accordance with cl 21.4.

45 'First Deed Payment' is defined to mean the sum of $3.5 million that must be paid by World Systems Capital pursuant to cl 13.1, the receipt of which is acknowledged by the Administrators and Pluton.

46 'Non-participating Creditors' include GNR, World Systems Capital, Watpac and any Secured Creditor.

47 The term 'Participating Creditor' is defined to mean:

Creditors other than Non-participating Creditors with a Claim against [Pluton]. For the avoidance of any doubt, the Participating Creditors include:

(a) the Priority Creditors;

(b) Rizhao in respect of the Rizhao DOCA Claim;

(c) the Former Receivership Creditors; and

(d) other Unsecured Creditors that are not Non-participating Creditors.

48 'Priority Creditor's Claim' is defined to mean a Participating Creditor with a Claim against Pluton as at the Relevant Date which, in a liquidation of Pluton, would have been a Claim which must be paid in priority to all other unsecured debts or claims in accordance with s 556, s 560 or s 561 of the Corporations Act, with the winding-up taken to have begun on the Relevant Date.

49 'Relevant Date' is defined to mean the date of the appointment of the Former Administrators, being 8 September 2015.

51 'Security Interest' is defined to mean any interest held by a Secured Creditor as security for the payment of a monetary obligation.

52 'Termination Date' is defined to mean the date on which the DOCA terminates in accordance with cl 21.

(a) the parties to this Deed;

(b) in accordance with (and subject to) section 444D(1) of the Corporations Act, all Creditors of [Pluton]; and

(c) in accordance with section 444G of the Corporations Act, [Pluton], its Officers and Members and the Administrators.

3.3 Property available to pay the Admitted Claims

Subject to clauses 4 and 5, and subject to the terms of this Deed, the property that will be available to pay the Admitted Claims is the Available Property.

3.4 Effect of deed on Participating Creditors' Claims

Subject to clauses 4 and 5, all Participating Creditors having a Claim must accept their entitlements under this Deed and the Creditors' Trust Deed in full satisfaction of any Participating Creditors' Claims which they have, or claim to have, against [Pluton] as at the Relevant Date.

(a) This Deed does not bind the Secured Creditors except insofar as section 444D of the Corporations Act requires.

(b) This Deed does not, despite any other term of this Deed, release or extinguish the Secured Creditors' Claims against [Pluton] and, for the avoidance of any doubt:

(i) the debts owing to Secured Creditors, and Claims by the Secured Creditors, will survive the Effectuation of this Deed and will not be released, discharged or compromised by the terms of this Deed; and

(ii) the Secured Creditors are free at any time to realise, enforce or otherwise deal with their Security Interest.

The Participating Creditors with Admitted Claims will be entitled to participate in the distribution of the Available Property in accordance with the terms of this Deed and the Creditors' Trust Deed.

[World Systems Capital] must, on or before the execution of this Deed:

(a) pay the sum of A$1,500,000 to the Administrators on a non-refundable basis and for the purpose of paying the Admitted Claims of the Participating Creditors (excluding Rizhao and the Former Receivership Creditors) in the order of priority specified in sections 444DA, 556, 560 and 561 of the Act; and

(b) pay the sum of A$1,000,000 to [Pluton] and [Pluton] must then pay those funds (without set-off, counterclaim or deduction) to the Former Receivership Creditors on a non-refundable basis and in reduction of their Participating Claims (and no other claims), such funds to be distributed in accordance with the directions of the Former Receivers to [Pluton] as soon as is practicable; and

(c) pay the sum of A$1,000,000 to [Pluton] and [Pluton] must then pay those funds (without set-off, counterclaim or deduction) to Watpac on a non-refundable basis in consideration for the agreements within this Deed as soon as is practicable with A$500,000 of the payment to be applied in reduction of the Watpac DOCA Claim, and for the avoidance of doubt, none of the A$1,000,000 can be netted off, or otherwise applied in reduction of, the Watpac Surviving Claim,

[Pluton] and the Administrators hereby acknowledge receipt of the First Deed Payment and Watpac acknowledge receipt of the payment referred to at 13.1(c).

...

13.3 First Deed Payment and Second Deed Payments an advance under the Convertible Note

(a) The First Deed Payment will constitute an advance by [World Systems Capital] to [Pluton] pursuant to the Convertible Note.

At Completion, the following shall occur (but only if the conditions in clause 12.1 and the Conditions Precedent are or have been satisfied or waived at Completion, or have been satisfied or waived prior to Completion):

(a) the parties to the Creditors' Trust Deed must execute the Creditors' Trust Deed;

(b) if it has not already occurred, the Deed Payments shall be paid by the Proponent [ie, World Systems Capital] ...;

(c) the Trustee must confirm in writing that it has received the Trust Fund and that it holds the Trust Fund on trust for the Admitted Claims of Trust Creditors in accordance with the terms of the Creditors' Trust Deed;

...

(e) the Administrator must deliver to [Pluton] a copy of the notice referred to at clause 21.4.

This Deed will continue in operation until it is terminated:

(a) by an order of the Court under section 445D of the Corporations Act; or

(b) by a resolution of the Creditors at a meeting convened under section 445F of the Corporations Act; or

(c) by the happening of any event which is by the terms of this Deed expressed to terminate this Deed automatically without recourse to the Court or to a meeting of the Creditors.

...

21.4 Termination of deed by Effectuation

(a) This Deed shall terminate immediately after Completion.

(b) Upon the termination of this Deed pursuant to clause 21.4(a), the Administrators must certify to that effect in writing and must as soon as practicable, and in any event within 2 Business Days from the date on which the last of the First Deed Payment and the Second Deed Payment are made, lodge with ASIC a notice of termination of this Deed in the following form: ...

(a) The termination of this Deed will not affect the previous operation of this Deed or the enforceability of any accrued obligations under the deed.

(b) On the termination of this Deed other than in accordance with clause 21.4, the Available Property will not be available to the Administrators' in respect of the Administrators' Costs, Expenses and Remuneration and will not be available for distribution to Creditors in any subsequent winding-up, administration or deed of company arrangement in respect of [Pluton], save to say that in the event that any of the Participating Creditors have been paid from the First Deed Payment prior to Completion, they will be entitled to retain such payments and neither [Pluton] nor [World Systems Capital] will have any claim against the Participating Creditors in respect of such payments.

(c) On termination of this Deed in accordance with clause 21.4 of this Deed, the Administrators will, subject to clause 4.2, be entitled to retain possession of all of [Pluton's] books and records.

The parties' submissions in the receivers' appeal Receivers' submissions

61 The receivers submitted that GNR has a security interest attached to the Fund by operation of the PPSA. In summary, it is submitted that GNR has a 'security interest' (as defined by s 12 of the PPSA) created by cl 2.2(a) of the Security Deed; the Fund is property of Pluton; the Fund is 'personal property' as defined by s 10 of the PPSA; the Fund falls within the meaning of 'Secured Property' as defined in cl 1.1 of the Security Deed; the security interest created by cl 2.2(a) of the Security Deed attached to the Fund; the security interest was enforceable against third parties; and the security interest was perfected under the PPSA.

62 The receivers contended, in effect, that the Fund was after-acquired property within the meaning of s 18 of the PPSA. They submitted that GNR's security interest attached to the Fund for the purposes of s 19(2)(a) from the date on which the relevant funds were paid by World Systems Capital to the Deed Administrators. They contended that Pluton had 'rights' in the money from that time, albeit that GNR was subject to an in personam obligation, by virtue of s 440D(2) of the Corporations Act, which precluded it from enforcing its security interest during the operation of the DOCA. However, once the DOCA terminated, that obligation had no continuing effect.

63 The receivers also contended that even if Pluton did not have rights in the Fund as from the date of receipt of the money for the purposes of the DOCA, once the DOCA had terminated, the Fund was, as was common ground, the property of Pluton.[36]

64 The receivers also contended that either 'value' was given for the security interest within the meaning of s 19(2)(b)(i) of the PPSA by the Security Deed, or that the Security Deed operates as a deed and was thereby an 'act by which the security interest arises' within the meaning of s 19(2)(b)(ii). Reference in this regard was made to the discussion in 'Australian Personal Property Securities Law' (2nd ed), Duggan and Brown [4.13].[37]

65 In relation to ground one, the receivers contended, in effect, that the master should have considered whether the security interest in cl 2.2(a)(i) of the Security Deed was exempted from the operation of the PPSA by virtue of the operation of s 8(1)(b) of the PPSA. It is submitted that the master erred by considering, in relation to s 8(1)(b) of the PPSA, whether the Fund arose or was provided for under a Commonwealth law, when he should have found that the Fund was simply the 'collateral' to which the security interest attached.

66 Ground two addresses the master's reasoning at [29] of the primary decision, where he stated that '[t]he question in this case is whether or not the Fund arose as a result of a consensual transaction'. It is submitted that the master erred by considering whether the Fund itself was a 'security interest', when the master ought to have considered whether the security interest created by cl 2.2(a)(i) of the Security Deed fell within the meaning of 'security interest' under s 12 of the PPSA. Again, the receivers submitted that the Fund was merely collateral, and not itself the security interest for the purposes of the PPSA. It is said that whilst the master accurately summarised Santamaria JA's analysis in Dura, he nevertheless misapplied that decision. The receivers contend that, in this case, GNR's security interest arises by reason of cl 2.2(a) of the Security Deed, by way of a consensual transaction, and not by operation of law.

67 In relation to ground 3, the receivers contend that even if the master was correct in finding that the Fund was not subject to a PPSA security interest, he erred in failing to consider whether it was subject to the fixed charge created by cl 2.2(a)(ii) of the Security Deed.

The basic question in this appeal is whether [Pluton's] interest in the funds (DOCA Funds) paid in by World System Capital ... under [the DOCA] arises as a matter of law by virtue of Part 5.3A of the Corporations Act 2001 (Cth) or is a right which Pluton acquired as the result of contractual consideration arising from the financial accommodation provided by [GNR] pursuant to [the] Security Deed. If it is the former then no security interest was capable of arising in respect to those funds under the [PPSA]. (footnote omitted)

69 The liquidators contended that the master correctly found that the interest which Pluton 'held in the DOCA Funds was created by the [Corporations] Act and not pursuant to a consensual transaction between Pluton and GNR'. Accordingly, the liquidators contended no security interest for the purposes of the PPSA arose, and as a consequence, there was no attachment of GNR's claimed security interest upon payment of those funds by World Systems Capital to Pluton.

70 In relation to ground 1, the liquidators contended that it is wrong to proceed on the basis that 'the only relevant time to determine whether a valid security interest under the PPSA arises is at the time of the initial entry into of the transaction giving rise to the security agreement'. They contended that it is necessary to consider whether the DOCA Funds fall within Pluton's claimed security interest at the time those DOCA Funds were paid in by World Systems Capital. They submit, in effect, that this proposition is supported by s 12 of the PPSA, which 'in its terms focuses attention on the "personal property" in which the interest is said to arise'. The liquidators also submit that, for the purposes of s 8(1)(b) of the PPSA, Pluton's 'right' to the DOCA Funds was 'created, arose or was provided for' entirely by the application of pt 5.3A of the Corporations Act. The liquidators submit that, viewed in the above context, the receivers face the difficulty that the 'DOCA Funds were paid to Pluton pursuant to Part 5.3A and not by a consensual transaction'.

71 They go on to submit that the termination of the DOCA 'did not alter the character of the DOCA Funds', and that the master was correct in holding (at [23]) 'that there is "in no sense ... a temporal component in the definition [in section 8(1)(b)]"'.

72 The liquidators also say that a further issue arises from the termination of the DOCA under s 445D by order of the court, in that, at the point that the DOCA Funds were released to the liquidators, the 'right' for those funds to be distributed in the liquidation was a consequence of a law of the Commonwealth. They submit that '[c]onsequently, if it were relevant to consider whether there was any change in the characterisation of those DOCA Funds at that point of termination the answer would be no, because there was still no consensual transaction and section 8(1)(b) precludes from the PPSA any interest that Pluton has in the DOCA funds that arose by law of the Commonwealth'.

73 In relation to ground 2, the liquidators contend that even if there were a consensual transaction pursuant to which GNR's security interest arose, a further issue arises 'at the point of attachment of that security interest to the DOCA Funds under section 19 of the PPSA because the DOCA Funds are after-acquired property under section 18(2)'.

The reference to ... antecedent consideration in section 19(2) does not ... overcome the need for 'consideration' to have been provided for the security interest that is claimed. That is, in circumstances such as this case where the DOCA Funds only came into existence because of the operation of Part 5.3A it cannot be said that the DOCA Funds were created by reason of the antecedent consideration arising from GNR's financial accommodation which enabled Pluton to continue as a going concern. No consideration, whether antecedent or otherwise, sufficient to support attachment under section 19 arises because the DOCA Funds arose as a feature of Part 5.3A in circumstances where Pluton was insolvent and not a going concern.

75 The liquidators also made a number of submissions concerning ground 3, the detail of which it is unnecessary to recount for present purposes given that, as indicated below, the receivers succeed in their appeal on grounds 1 and 2 in any event.

76 By s 12(1) of the PPSA, a 'security interest' means an 'interest in personal property' provided for by a 'transaction' that, in substance, secures payment or performance of an obligation. A 'transaction' is not defined in the PPSA, but bears its ordinary meaning.[38] The word 'transaction' encompasses the Security Deed in this case.

77 The Security Deed, by cl 2.2(a)(i), provides for the grant to GNR by Pluton of a 'Security Interest' in all and any 'Secured Property' to which the PPSA applies.

78 The term 'Security Interest' in the Security Deed is defined broadly and includes a 'security interest' as defined in s 12 of the PPSA. The term 'Secured Property' is defined in the Security Deed to mean 'all of the property' of Pluton, irrespective of whether 'present or future'. The liquidators in this appeal accepted that 'future' property in this context includes 'after-acquired property' within the meaning of that term in the PPSA.[39] It is to be noted that s 18(2) of the PPSA provides that a security agreement (such as the Security Deed in this case) may provide for 'security interests' in 'after-acquired property'.

79 Accordingly, GNR has an 'interest in personal property' provided for by the Security Deed, being, relevantly, an interest in the whole of Pluton's personal property, whether present or future, including 'after-acquired property' within the meaning of the PPSA. By cl 2.2(a), the interest granted secures payment of the 'Secured Money'. It thereby, 'in substance, secures payment ... of an obligation' within the meaning of s 12(1) of the PPSA.

80 A security agreement such as the Security Deed is effective according to its terms: s 18(1) of the PPSA. It follows from the foregoing that GNR's interest is a security interest within the meaning of s 12(1) of the PPSA. GNR's interest is created, arises or at least is provided for under a 'transaction', namely the Security Deed. It is not an interest 'that is created, arises or is provided for under a law of the Commonwealth' within the meaning of s 8(1)(b) of the PPSA. Part 5.3A of the Corporations Act is irrelevant to the analysis here. That is because both s 8(1)(b) and s 12(1) relevantly direct attention to the source of the interest in personal property, not to the source of the property itself.

81 Further, there is no dispute as to the fact of registration of GNR's security interest. Registration involves the registration of data pursuant to the provisions of ch 5 of the PPSA. These include s 153(1) and item 4 of the table in s 153. Item 4(c) of the table refers to a description of 'collateral [belonging] to a single class of collateral prescribed by the regulations'. The relevant class of collateral for present purposes is that provided for in the Personal Property Securities Regulations 2010 (Cth), sch 1 pt 2 cl 2.3(1)(c), being 'all present and after-acquired property'. That term is defined in reg 1.6 to mean, in effect, personal property over which the grantor has an interest at the registration time for the financing statement for a security interest, and personal property acquired after the registration time for the financing statement for the security interest. There is no dispute that the Fund is personal property acquired by Pluton after the relevant registration time.

82 In this context, the Fund falls within the meaning of par (b) of the definition of 'collateral' in s 10 of the PPSA in that it is 'personal property' which is 'described' by GNR's registration of the financing statement, by reference to the class of property.

83 The next question is whether the Fund is personal property to which GNR's security interest is 'attached' within the meaning of par (a) of the definition of 'collateral' in s 10. A further and related question is whether the 'security interest' granted by Pluton under the Security Deed is enforceable against Pluton in respect of the Fund under s 19(1) of the PPSA. In this context, it is relevant to note that the Fund is after-acquired property, and a security interest in it attaches without specific appropriation by Pluton: s 18(3) of the PPSA.

84 A security interest attaches to collateral in accordance with s 19(2)(a) and (b)(i), when (1) the grantor (Pluton) has 'rights' in the collateral and (2) 'value' is given for the security interest. As to the first of those matters, it is common ground that the Fund was the property of Pluton on 21 July 2016, upon the termination of the DOCA. It follows that Pluton had 'rights' in the Fund as at that time. It is unnecessary to determine whether Pluton had rights in the Fund as from the date that World Systems Capital originally contributed the sum of $3.5 million for the purposes of the First Deed Payment under the DOCA. As to the second matter, 'value' is defined in s 10 to mean consideration that is sufficient to support a contract. There is no doubt that 'value' was given in this case prior to 21 July 2016. It is unnecessary to determine when precisely that occurred and whether, for example, it occurred upon the execution of the Security Deed in accordance with cl 2.5, or upon the Security Deed becoming unconditional, or at the latest when money was advanced pursuant to a Transaction Document. In other words, GNR's security interest in the Fund attached by no later than 21 July 2016 and became enforceable against Pluton.

85 GNR's security interest in the Fund also became enforceable against third parties on, by the latest, 21 July 2016 pursuant to s 20 of the PPSA. That is because, as indicated above, it had by then attached to the Fund and, at that point, it may be said that 'the security interest covers the collateral' in accordance with s 20(1)(b)(iii) read with s 20(2). In that regard, there is no dispute that the Security Deed is a 'security agreement' compliant with s 20(2) of the PPSA.

86 The next matter to consider is 267 of the PPSA. The first three events referred to in s 267(1)(a) apply to Pluton, the earliest of which, the subject of s 267(1)(a)(ii), is the appointment of administrators on 8 September 2015. The effect of s 267(1)(b) and s 267(2) is that the security interest held by GNR would vest in Pluton if the security interest was not 'perfected' immediately before, relevantly, 8 September 2015.

87 By s 21(1), a security interest in the Fund (collateral) is perfected if, relevantly, (1) the security interest is attached to the collateral, (2) it is enforceable against a third party, and (3) s 21(2) applies. The former two requirements, as noted above, are met. As to the third requirement, there was no dispute about registration being 'effective' in accordance with s 21(2)(a) if the Fund were (as is the case) collateral. Also, there was no dispute that registration occurred on 2 May 2013.

88 For these reasons, the master should have concluded that GNR had a security interest in the Fund created by the Security Deed which was perfected and enforceable for the purposes of the PPSA, and that the receivers were entitled to take possession of the Fund on 21 July 2016 as receivers and managers of the property of Pluton.

89 As to ground 1, the master erred, with respect, in considering, and holding, in effect, that in relation to s 8(1)(b) of the PPSA, the Fund was created, arose or was provided for under a Commonwealth law. He should, with respect, have held that the Fund was 'collateral' to which the 'security interest' attached, and that s 8(1)(b) is concerned with a 'security interest' and not 'collateral'. For the purposes of s 8(1)(b), the question was not, as the master asked, whether the Fund was created, arose or was provided for under a Commonwealth law. Section 8(1)(b) directs attention to an interest in personal property, not to the personal property itself. As we have said, GNR's interest in the Fund was created by and arose under the Security Deed, so s 8(1)(b) had no application.

90 Similarly, in relation to ground 2, the master, with respect, erred in considering whether the Fund arose as a result of a consensual transaction for the purposes of the application of s 12(1) of the PPSA. The question raised by s 12(1) is whether GNR's interest in the Fund was an interest in personal property 'provided for by a transaction', the 'transaction' being, relevantly, the Security Deed. The master, with respect, misdirected himself as to, and misapplied, s 12(1) of the PPSA. The decision in Dura, on which the master seems to have relied, provided no relevant assistance in the determination of the dispute between the receivers and the liquidators in this matter. Dura decided, in effect, that the payment made by a judgment debtor in order to secure the stay of execution of a judgment debt pending the determination of its appeal, gave the judgment creditor, by operation of law, an equitable charge over the money the subject of the payment.[40] The equitable interest so created arose or was provided for by the operation of the general law within the meaning of s 8(1)(c) of the PPSA, and hence was an excluded interest for the purposes of the PPSA. Also, there was no 'security interest' in the money within the meaning of s 12(1) of the PPSA because the judgment creditor's interest did not arise out of a consensual transaction, but arose when the money was paid into the account in connection with a court order.[41] Dura was not concerned with a 'security interest' arising under a 'transaction' or 'security agreement' such as the Security Deed in this case.

91 None of the arguments advanced by the liquidators in the appeal demonstrates the correctness of the master's decision. Much of the liquidators' argument was put at a level of generality that did not engage with the text of the statute or of the Security Deed. To the extent that the liquidators' arguments were directed to the statutory text, in substance, the liquidators repeat the master's errors. Grounds 1 and 2 of the receivers' appeal should be upheld.

92 It is unnecessary to consider ground 3 of the receivers' grounds of appeal.

93 As the receivers' appeal must succeed, the liquidators' appeal must, correspondingly, fail.

94 The receivers asserted that their appeal did not require leave. The liquidators asserted that it did. There was limited argument on the topic. As to the requirements for leave, see, eg, Allmark v Mossensons (a firm).[42]

95 It is unnecessary to determine the question of whether the receivers require leave. Leave to appeal in CACV 67 of 2017 should be granted to the extent that is necessary, and the appeal should be allowed.

96 It was not in dispute that the liquidators' appeal required leave. The application for leave to appeal, and the appeal, in CACV 68 of 2017, should be dismissed.

Schedule The Personal Property Securities Act 2009 (Cth)

(1) This Act does not apply to any of the following interests (except as provided by subsection (2) or (3)):

(b) a lien, charge, or any other interest in personal property, that is created, arises or is provided for under a law of the Commonwealth (other than this Act), a State or a Territory, unless the person who owns the property in which the interest is granted agrees to the interest;

(c) a lien, charge, or any other interest in personal property, that is created, arises or is provided for by operation of the general law[.]

after-acquired property means personal property acquired by the grantor after a security agreement is made.

attaches has the meaning given by section 19.

collateral:

(a) means personal property to which a security interest is attached; and

(b) in relation to a registration with respect to a security interest-includes personal property described by the registration (whether or not a security interest is attached to the property).

Note: Section 161 authorises the registration of a financing statement that describes personal property before or after a security agreement is made covering the property, or a security interest has attached to the property.

description of personal property (including collateral and proceeds) means:

(a) in the case of a particular item of personal property--a description that identifies the item, or that identifies a class to which the item belongs; or

(b) in the case of a class of personal property--a description that identifies the class, including a description that identifies the class by identifying a larger class of personal property that wholly includes the class.

effective: a registration is effective with respect to particular collateral if it is effective with respect to that collateral under Part 5.4.

financing statement means data registered (or that is to be registered) pursuant to an application for registration under subsection 150(1).

Note: For requirements relating to financing statements, see Part 5.3 (Registration).

(a) a person who has the interest in the personal property to which a security interest is attached (whether or not the person owes payment or performance of an obligation secured by the security interest); or

interest, in personal property, includes a right in the personal property.

personal property means property (including a licence) other than:

(a) land; or

(b) a right, entitlement or authority that is:

(i) granted by or under a law of the Commonwealth, a State or a Territory; and

(ii) declared by that law not to be personal property for the purposes of this Act.

Note: This Act does not apply to certain interests even if they are interests in personal property (see section 8).

register means the Personal Property Securities Register established under section 147.

registration means a registered financing statement (as amended by any registered financing change statement) with respect to:

(a) a security interest; or

(b) personal property prescribed by regulations made for the purposes of paragraph 148(c).

registration commencement time has the meaning given by section 306.

(a) an agreement or act by which a security interest is created, arises or is provided for; or

(b) writing evidencing such an agreement or act.

security interest has the meaning given by section 12.

(a) means consideration that is sufficient to support a contract; and

(b) includes an antecedent debt or liability[.]

(1) A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property).

Note: For the application of this Act to interests, see section 8.

1. General rules about security agreements and security interests

(1) A security agreement is effective according to its terms.

(2) A security agreement may provide for security interests in after-acquired property.

(3) A security interest in after-acquired property attaches without specific appropriation by the grantor.

(4) A security agreement may provide for future advances.

(5) A security interest is taken to secure reasonable expenses in relation to the enforcement of the security interest, unless the parties agree otherwise.

1. Enforceability of security interests against grantors -attachment

(1) A security interest is enforceable against a grantor in respect of particular collateral only if the security interest has attached to the collateral.

(2) A security interest attaches to collateral when:

(a) the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party; and

(b) either:

(ii) the grantor does an act by which the security interest arises.

(3) Subsection (2) does not apply if the parties to a security agreement have agreed that a security interest attaches at a later time, in which case the security interest attaches at the time specified in the agreement.

(4) To avoid doubt, a reference in a security agreement to a floating charge is not a reference to an agreement that the security interest created by the floating charge attaches at a time later than provided under subsection (2).

1. Enforceability of security interests against third parties

(1) A security interest is enforceable against a third party in respect of particular collateral only if:

(a) the security interest is attached to the collateral; and

(b) one of the following applies:

(ii) the secured party has perfected the security interest by control;

(iii) a security agreement that provides for the security interest covers the collateral in accordance with subsection (2). (emphasis added)

(2) A security agreement covers collateral in accordance with this subsection if:

(a) the security agreement is evidenced by writing that is:

(ii) adopted or accepted by the grantor by an act, or omission, that reasonably appears to be done with the intention of adopting or accepting the writing; and

(b) the writing evidencing the agreement contains:

(i) a description of the particular collateral, subject to subsections (4) and (5); or

(ii) a statement that a security interest is taken in all of the grantor's present and after-acquired property; or

(iii) a statement that a security interest is taken in all of the grantor's present and after-acquired property except specified items or classes of personal property.

(1) A security interest in particular collateral is perfected if:

(a) the security interest is temporarily perfected, or otherwise perfected, by force of this Act; or

(b) all of the following apply:

(i) the security interest is attached to the collateral;

(ii) the security interest is enforceable against a third party;

(a) for any collateral, a registration is effective with respect to the collateral[.]

(3) A security interest may be perfected regardless of the order in which attachment and any step mentioned in subsection (2) occur.

(4) A single registration may perfect one or more security interests.

Chapter 5 is headed 'Personal Property Securities Register'. It includes the following provisions.

Section 147(1) provides that 'the Registrar must establish and maintain a register to be known as the Personal Property Securities Register'.

(a) data in registered financing statements (as amended by any registered financing change statements) with respect to security interests;

(b) data (if any) prescribed by regulations made for the purposes of this paragraph in relation to registrations, or possible registrations;

(c) data in registered financing statements (as amended by any registered financing change statements) with respect to personal property, being personal property that is prescribed by regulations made for the purposes of this paragraph.

(1) A person may apply to the Registrar to register a financing statement with respect to:

(3) The Registrar must register the financing statement or financing change statement in accordance with the application, but only if:

(a) the application is in the approved form; and

(b) the fee (if any) determined under section 190 has been paid; and

(c) the Registrar is not satisfied that the application is:

(i) frivolous, vexatious or offensive, or contrary to the public interest; or

(ii) made in contravention of section 151 (belief about security interest); and

(d) the registration would not be prohibited by the regulations.

1. Financing statements with respect to security interests

(1) A financing statement with respect to a security interest (including such a financing statement as amended by the registration of a financing change statement) consists of data that complies with the following table:

Financing statements with respect to security interests

A collateral description in accordance with all of the following rules

(a) the collateral must be described as one of the following:

(b) the collateral may or must be described by serial number, if allowed or required by the regulations;

(c) the collateral must belong to a single class of collateral prescribed by the regulations;

(d) any description of proceeds must comply with the regulations.

Note: 2 or more types of collateral that belong to different classes prescribed by the regulations must be described in separate registrations. However, 2 or more registrations can be effected through a single application.

1. This Part provides for the time at which a description of collateral is registered. The precise timing of a registration may be significant in determining the priority to be given to a security interest in the collateral (see section 55).

This Part also deals with when a registration is effective and registration defects that may cause it to become ineffective.

A registration is effective from the registration time until the earliest of:

(a) the registered end time; or

(b) an amendment time; or

(c) the time when the registration stops being available for search in the register.

A registration is only ineffective because of a defect if there is a seriously misleading defect in data relating to the registration, or one of a number of particular defects set out in section 165 exists.

If a security interest in certain property becomes unperfected, the secured party may be obliged to take steps to end the effect of the registration.

(1) A description of collateral starts to be registered in a registration with respect to a security interest, in relation to a particular secured party, at the moment (the registration time) when the description becomes available for search in the register in relation to that secured party.

(1) A registration with respect to a security interest that describes particular collateral, in relation to a secured party, is effective with respect to that collateral from the registration time for the description of the collateral until the earliest of the following times:

(a) the end time (if any) registered for the collateral;

(b) if the registration is amended to omit the collateral description--the amendment time;

(c) the time when the description of the collateral in the registration stops being available for search in the register (by reference to that time) in respect of the secured party.

(2) This section is subject to sections 164, 165 and 166 (defects in registration).

Chapter 8 is headed 'Miscellaneous'. It includes s 266 - s 267 and s 303.

1. This Part provides for the vesting of an unperfected security interest in the grantor in certain circumstances.

In the event of the bankruptcy of an individual grantor, or the winding up or the entry into administration of a body corporate grantor, a secured party's unperfected security interest vests in the grantor. However, some security interests are unaffected by this rule.

Some secured parties are entitled to damages or compensation in relation to the vesting of unperfected interests under this Part.

1. Vesting of unperfected security interests in the grantor upon the grantor's winding up or bankruptcy etc.

Scope

(1) This section applies if:

(i) an order is made, or a resolution is passed, for the winding up of a company or a body corporate;

(ii) an administrator of a company or a body corporate is appointed (whether under section 436A, 436B or 436C of the Corporations Act 2001, under that section as it is applied by force of a law of a State or Territory, or otherwise);

(iii) a company or a body corporate executes a deed of company arrangement (whether under Division 10 of Part 5.3A of the Corporations Act 2001, under that Division as it is applied by force of a law of a State or Territory, or otherwise);

(iv) a sequestration order is made against a person (the bankrupt) under the Bankruptcy Act 1966;

(v) a person (the bankrupt) becomes a bankrupt by force of section 55, 56E or 57 of the Bankruptcy Act 1966; and

(b) a security interest granted by the body corporate, company or bankrupt is unperfected at whichever of the following times applies:

(i) in the case of a company or body corporate that is being wound up--when, on a day, the event occurs by virtue of which the winding up is taken to have begun or commenced on that day (whether under section 513A or 513B of the Corporations Act 2001, under either section as applied by force of a law of a State or Territory, or otherwise);

(ii) in the case of any other company or body corporate--when, on a day, the event occurs by virtue of which the day is the section 513C day for the company or body, within the meaning of the Corporations Act 2001 (including that Act as it is applied by force of a law of a State or Territory, or otherwise);

(iii) in the case of a bankrupt--when a sequestration order is made against the bankrupt under the Bankruptcy Act 1966, or when he or she becomes a bankrupt by force of section 55, 56E or 57 of that Act.

...

Security interest vested in grantor

(2) The security interest held by the secured party vests in the grantor immediately before the event mentioned in paragraph (1)(a) occurs.

Section 303 provides:

The Governor-General may make regulations prescribing matters:

(a) required or permitted by this Act to be prescribed; or

(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.

Personal Property Securities Regulations 2010 (Cth)

By reg 1.6, the term 'all present and after-acquired property' is defined to mean:

(a) personal property over which the grantor has an interest at the registration time for the financing statement for a security interest or prescribed property; and

(b) personal property acquired after the registration time for the financing statement for the security interest or prescribed property.

(1) For paragraph (c) of item 4 of the table in subsection 153(1) of the Act, the following classes of collateral are prescribed:

...

(c) all present and after-acquired property[.]

[1] Pluton Resources Ltd (Receivers & Managers Appointed) (in liq) [2017] WASC 142.

[4] The following background is taken from the primary decision, unless otherwise indicated.

[8] Ziziphus Pty Ltd v Pluton Resources Limited (Receivers and Managers Appointed) (Subject to Deed of Company Arrangement) [2016] WASC 276 (DOCA decision) [22]; GB 5.

[16] Primary decision [11]; BB 18 - 20.

[17] Primary decision [12]; GB 22 - 23.

[27] Primary decision [18]-[19], [31].

[28] Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd [2015] WASCA 95; (2015) 197 FLR 1 [59] - [64].

[31] Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd [2014] VSCA 326; (2014) 49 VR 86.

[39] 'After-acquired property' is defined in s 10 of the PPSA. Appeal ts 5.

[40] The court held that it did not matter that the money was not paid into court but was paid into an interest-bearing account in the joint names of the solicitors for the judgment debtor and the solicitors for the judgment creditor.

[41] See Dura [85] - [87], [114], [126] - [128].

[42] Allmark v Mossensons (a firm) [2006] WASCA 127 [26].