In the matter of Antqip Hire Pty Ltd (in liq) [2021] NSWSC 1122

Background

1. The Companies were engaged in the business of hiring equipment. Their sole director Mr Tony Russell caused them to go into voluntary administration on 3 February 2014. On 28 February 2014, the administrators circulated a report to creditors, including the Deputy Commissioner for Taxation. On or about 1 March 2014, the Commissioner proved in the administrations, for a debt of $4,884,523.48.
2. On 4 April 2014, the administrators circulated a supplementary report to creditors, in which it was assessed that the ATO's claim at $3,680,484, comprising $1,781,864 for unpaid superannuation guarantee charge in relation to Antqip Hire, which claim was entitled to priority under CORPA, s 556(1)(e), and $1,898,620 in respect of GST and PAYG (which was not entitled to priority). The supplementary report analysed a number of scenarios, including under proposed DoCAs and in the event of liquidation. Under the DoCAs, in the case of Antqip Hire, a deed fund of $400,000 was to be constituted, payable as to $150,000 within one month, and as to $250,000 over fifty months commencing six months after execution, from the profits of a related entity, Antqip Plant Hire Pty Ltd ("APH"). Although the deed fund would be exhausted by the ATO's priority claim, it was estimated that it would receive a greater dividend in respect of it under the DoCA than upon liquidation. In the case of Antqip, a deed fund of $3,100,000 was to be constituted, payable as to $750,000 within one month, and as to $2,350,000 over fifty months commencing six months after execution, from the profits of APH. It was estimated that while on liquidation ordinary unsecured creditors would receive a dividend between nil and 9 cents in the dollar, under the DoCA they would receive 21 cents in the dollar. The administrators recommended that the creditors approve the Companies entering into proposed DoCAs.
3. On or about 8 May 2014, the creditors resolved that the Companies enter into the DoCAs, and in due course the Companies did so. Consequent thereon, the administrators became Deed Administrators.
4. When they went into administration, the Companies were indebted to Bibby, which held security for its debts. Under the DoCAs, Bibby was an "excluded secured creditor", with the consequence that it was not entitled to share in the deed fund, but its remedies as a secured creditor were preserved.

The Deed of Charge and the 2014 Registrations

1. The Deed of Charge of 26 October 2014 in favour of National secured loan funds which were applied to refinance the loans from Bibby. Although the DoCAs each contained a provision to the effect that the Company must not charge, encumber, or dispose of any property other than in the ordinary course of business without the written permission of the deed administrator, there is no evidence of any such written permission. However, it is clear that the deed administrators were aware of and did not object to the transaction, apparently regarding it as "in the ordinary course of business" on the basis that it did no more than refinance the existing secured debt and did not adversely affect the position of unsecured creditors.
2. On 27 October 2014, PPSR financing statements were lodged by Bransgroves, the solicitors then acting for National, in respect of the security interests created by the Deed of Charge. As a result, numerous PPSR registrations were effected. They fall into three categories. The first category, which comprised most of the registrations, were in respect of collateral identified in each case as a specific item in the class "other goods and motor vehicle". They specified a registration start time on 28 October 2014, with "no stated end time". They identified the secured party's address for service as Paul Reese, then of Bransgroves. The second category of registrations were also in respect of collateral identified in each case as a specific item in the class "other goods and motor vehicle". They specified a registration start time on 19 November 2014 and end time on 19 November 2021, that is to say a period of seven years, and provided as the address for service Sonya Wilcan, at "NWC Finance". Ms Wilcan was an employee of National. The third, and for present purposes most relevant category, comprised a single registration - the Original AllPAP 6615 Registration. It was in respect of "all present and after-acquired property" of the Companies, and had a start time on 27 October 2014 and an end time on 27 October 2017 - a period of three years. The address for service was Katie.B@Bransgroves.com.au.
3. On 4 November 2014, Mr Reese sent an email to Ms Wilcan, as follows (emphasis added): "Hi Sonya, Could you please let me know what funds remain available to the borrower in this matter. Unfortunately the PPSR registrations done on this matter have attracted a cost of $50,000!!!!!!!!!!!!! (unfortunately it is not a joke). The reason for this is, due to the number of them (270 odd), Katie outsourced the work and did all registrations with a no end date. This somehow attracted a charge of $200 plus gst per registration. The normal cost for seven years' registration for this amount of PPSR is about $3K. I think we should be able to decrease the cost to about $35K. I obviously don't want to be personally liable for all $35K (which is what happens here) but have resigned myself that I most likely will. I was wondering what your thoughts were with respect to paying the costs. There are a few suggestions I have to pay the costs: 1. I pay the entire amount personally due to our error at Bransgroves; or 2. I pay half (or any other amount that is fair) and the borrower pays the other half; or 3. The borrower pays the entire amount in which case his debt increases by about $34K."

The 2019 Registrations

1. The Original AllPAP 6615 Registration expired on 27 October 2017. There is nothing to suggest that anyone in National's camp adverted to this, and it is in the ordinary course of things that no-one would have done so, given the circumstances in which it had been registered contemporaneously with numerous other registrations which had either seven-year or open-ended end dates.
2. Mr Morello, a director of National, deposed that on or about 8 October 2018, he began to become concerned that it might be necessary to enforce National's security in respect of the Companies, and so he instructed ERA Legal ("ERA"), solicitors, to obtain the file in relation to the loans from National's previous solicitors. In January 2019, the Companies defaulted in respect of their interest obligations to National. In about April 2019, National instructed ERA to advise on and assist in respect of the defaults, including as to recovery options against the borrowers and the guarantors. ERA undertook PPSR searches on 2 April 2019. Having reviewed them, on 18 April 2019 ERA ascertained that there was no extant AllPAP security registration in favour of National over the property of the Companies, as the Original AllPAP 6615 Registration had lapsed on 27 October 2017. ERA informed National of this that day. Mr Morello deposed: "When I was told that I was astounded because it was always my belief that the plaintiff had registered all present and after-acquired property security interests registered on the PPSR with no expiry dates."
3. Mr Morello also deposed: "I do not know why Bransgroves only registered, or instructed the initial AllPAP registration for three years. Had I been made aware that the registration had an expiry time, I would have taken immediate action to renew the initial AllPAP registration before their expiry date in order to extend them."
4. 19 April 2019 was Good Friday, and 22 April 2019 Easter Monday. On 23 April 2019, ERA created a new "secured party" for National on the PPSR, and on 24 April 2019 lodged the two 2019 AllPAP registrations (numbered 2781 and 2907) the subject of the present application.
5. Mr Morello deposed that National did not immediately apply for an extension of time for the 2019 Registrations, as it considered that its position was protected by the extant other goods and motor vehicle registrations, that the Companies had not traded since entering into the DoCAs, and that there was not a significant risk of the AllPAP securities vesting, as it did not foresee the Companies going into liquidation or administration as they were subject to the DoCAs. Mr Anderson, solicitor of ERA, deposed that he advised Mr Morello that the 2019 Registrations, coupled with the extant other goods and motor vehicle registrations, protected National's interests. It had not occurred to him prior to 27 May 2019 that there was any risk of the 2019 Registrations vesting under s 588FL, because he perceived no risk of the Companies being placed into liquidation or administration, as both were subject to a DoCA and not trading.

Liquidation

1. Both Companies went into voluntary liquidation as a result of a resolution passed on 27 May 2019, when the Liquidators were appointed. By this time, National's secured debt had increased to $7,040,219. On 28 May 2019, National appointed receivers of all of the property of the Companies the subject of the PPSR registrations.
2. Mr Anderson deposed that even after becoming aware that the Companies had gone into liquidation, he did not give advice to bring an application for an extension of time, because the Companies remained subject to the DoCAs, and so far as he was aware had no other assets, so that there appeared to be no utility in obtaining an extension. However, on 27 June 2019, Mr Anderson was informed that proceedings had been commenced by the Liquidators seeking to set aside the DoCAs ("the DoCA Proceedings"). As an excluded secured creditor, National had no claim on the deed funds, comprising $1,828,323 in relation to Antqip and $41,788 for Antqip Hire, but if the DoCAs were set aside, those funds would become assets of the Companies in liquidation and caught by the Deed of Charge. He then considered it prudent to commence the present proceedings, pending the determination of the DoCA Proceedings. The originating process was filed on 22 October 2019.
3. The DoCA Proceedings, in which the Liquidators sought orders confirming the validity of their appointment, terminating the DoCAs, and requiring the deed funds to be paid to the Liquidators, were heard before Rees J on 23 October 2019 and determined on 5 May 2020, when her Honour declared that the appointment of the Liquidators was valid, and that the deed funds had vested in the Liquidators. [1] The practical consequence of National's application, if successful, is that the proceeds of the deed funds, having vested in the Liquidators as a result of the liquidation, would now be available to, and exhausted by, National, whereas previously, as an "excluded secured creditor", it had no recourse to the deed funds, which were solely for the benefit of the unsecured creditors.

Leave to proceed: CORPA, s 500(2)

1. As the companies are in liquidation, the plaintiff sought leave to proceed against them, pursuant to CORPA, s 500(2). It is unnecessary to resolve whether leave is required, in the sense that this is a "proceeding" of the kind contemplated by s 500. Assuming that it is, where leave is sought by a secured creditor it is not for the Court to exercise some sort of general discretionary judgment, nor to consider what course of action will best serve the interests of creditors generally and shareholders, but leave is granted "as of right". [2] The Liquidators did not appear to oppose leave, which should be granted, [3] insofar as it is required.

The statutory provisions: CORPA, ss 588FL, 588FM

1. CORPA, s 588FL, has the effect that certain (CTH) Personal Property Securities Act 2009 ("PPSA") security interests granted by a company vest in the company if a relevant insolvency event (an order or resolution for winding up, the appointment of administrators, or the execution of a DoCA) occurs, and the security interest has not been registered earlier than six months before the commencement of the winding up or administration, or within twenty business days after it was granted: (1) This section applies if: (a) any of the following events occurs: (i) an order is made, or a resolution is passed, for the winding up of a company; (ii) an administrator of a company is appointed under section 436A, 436B or 436C; (iii) a company executes a deed of company arrangement under Part 5.3A; and (b) a PPSA security interest granted by the company in collateral is covered by subsection (2). Note: A security interest granted by a company in relation to which paragraph (a) applies that is unperfected at the critical time may vest in the company under section 267 or 267A of the Personal Property Securities Act 2009. (2) This subsection covers a PPSA security interest if: (a) at the critical time, or, if the security interest arises after the critical time, when the security interest arises: (i) the security interest is enforceable against third parties under the law of Australia; and (ii) the security interest is perfected by registration, and by no other means; and (b) the registration time for the collateral is after the latest of the following times: (i) 6 months before the critical time; (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 time is earlier; (iii) if the security agreement giving rise to the security interest came into force under the law of a foreign jurisdiction, but the security interest first became enforceable against third parties under the law of Australia after the time that is 6 months before the critical time - the time that is the end of 56 days after the security interest became so enforceable, or the time that is the critical time, whichever time is earlier; (iv) a later time ordered by the Court under section 588FM. … (4) The PPSA security interest vests in the company at the following time, unless the security interest is unaffected by this section because of section 588FN: (a) if the security interest first becomes enforceable against third parties at or before the critical time - immediately before the event mentioned in paragraph (1)(a); (b) if the security interest first becomes enforceable against third parties after the critical time - at the time it first becomes so enforceable. Note: For the meaning of critical time, see subsection (7).

The "critical time"

1. The "critical time" is an important integer in determining whether a particular security interest is "covered by subsection (2)" for the purposes of s 588FL(1)(b). In s 588FL(7), "critical time" is defined as follows: critical time, in relation to a company, means: (a) if the company 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 under section 513A or 513B; or (b) if the company is under administration or is subject to a deed of company arrangement - when, on a day, the event occurs by virtue of which the day is the section 513C day for the company.
2. Read in the context of s 588FL(1)(a), which contemplates three classes of triggering insolvency events - an order or resolution for the winding up of a company, the appointment of an administrator, and the execution of a DoCA - s 588FL(7) deals with the first of those events (winding up) in para (a) of the definition; and the other events (administration and execution of a DoCA) in para (b). In the present case, because the Companies are being wound up, it is para (a) that applies. The effect of the definition in s 588FL(7)(a) is that, for a company that is being wound up, the "critical time" is a time on the day upon which the winding up is taken to have begun or commenced under section 513A or 513B. Section 513A applies to windings up ordered by the Court and is not presently relevant. Section 513B applies to voluntary windings up, and relevantly provides as follows: Where a company resolves by special resolution that it be wound up voluntarily, the winding up is taken to have begun or commenced: … (b) if, immediately before the resolution was passed, the company was under administration - on the section 513C day in relation to the administration; or (c) if, immediately before the resolution was passed, a deed of company arrangement had been executed by the company but had not yet terminated - on the section 513C day in relation to the administration that ended when the deed was executed; or … (e) otherwise - on the day on which the resolution was passed.
3. As, immediately before the winding up resolution was passed on 27 May 2019, a deed of company arrangement had been executed by the Companies and had not yet terminated, it is para (c) that is applicable. It in turn refers to "the section 513C day in relation to the administration that ended when the deed was executed". Section 513C relevantly provides as follows: The section 513C day in relation to the administration of a company is: (a) if, when the administration began, a winding up of the company was in progress - the day on which the winding up is taken because of this Division to have begun; or … (b) otherwise - the day on which the administration began.

Does s 588FL apply to security interests granted after the critical time?

1. In that context, the question arises whether s 588FL applies to a security interest that is granted after the "critical time".
2. A security interest is covered by s 588FL(2) if the requirements of paras (a) and (b) are satisfied. Paragraph (b) is concerned with the timeliness of registration. Paragraph (a) has the effect that a security interest will be covered if it is enforceable against third parties, and perfected by registration (and by no other means), at the critical time, or, if it arises after the critical time, then when it arises. Thus the provision is to be applied as at two different times, according to whether the security interest arises before or after the "critical time": if before, as at "the critical time", and if after, as at the time "when the security interest arises".
3. In In the matter of OneSteel Manufacturing Pty Ltd (admins apptd), [10] I held that an order under s 588FM only immunised a perfected security interest from vesting under s 588FL(4). I said: [11] "[69] An order under s 588FM provides relief from the consequences of failure to register a security interest within time, with the consequences that a security interest is no longer in jeopardy of being vested in the grantor, in case of an insolvency event, on account of its belated registration. The effect of such relief is that should an insolvency event occur within six months of actual registration, although the security interest would otherwise vest in the grantor under s 588FL(4) because of its belated registration, it will not vest under that provision. However, an order under s 588FM fixes a later time only "for the purposes of subparagraph 588FL(2)(b)(iv)". An order under s 588FM does not resurrect a security interest which has vested in the grantor for a reason other than late registration. In other words, it serves to immunise the relevant security interest only against the consequences of what would otherwise be late registration. [70] In this respect, it is notable that such relief is available only in respect of a security interest that has been perfected as at the "critical time". Together, s 588FL(1) and (2) mean that s 588FL applies only to a security interest that "at the critical time" is enforceable against third parties and "is perfected by registration, and by no other means". Alleasing's submission that the phrase is perfected by registration means "is capable of being perfected" must be rejected. The opening words of s 588FL(2)(a) - "at the critical time, or, if the security interest arises after the critical time, when the security interest arises" - indicate that the security interest must have the status of being perfected at that time. Moreover, pursuant to CORPA s 588FK, the term "is perfected" has the same meaning in CORPA as in the PPSA, where s 21 uses the present tense in the same way: … [72] That s 588FM is concerned only to provide relief from the consequences of belated registration of perfected interests, and is not concerned with unperfected interests, is reinforced by the note to s 588FL(1), which is to the effect that a security interest granted by a company which has an insolvency event, that is unperfected at the critical time, may vest in the company under PPSA s 267 or s 267A. [73] Section 588FM provides a means for obtaining relief from the consequences of belated registration of security interests granted by companies. Notably, it applies only to interests granted by companies. However, s 267, which vests unperfected security interests, applies to interests granted by individuals as well as those granted by companies. It would be discordant if a vesting under s 267 were amenable to cure by relief under s 588FM where the grantor was a company, but not otherwise. [74] Accordingly, an order under s 588FM does not immunise an unperfected security interest from vesting under s 267(2), but only a perfected security interest from vesting under s 588FL(4)."

Alternatively, would it be just and equitable to fix a later time?

1. Lest I be wrong in that conclusion, it is appropriate to consider the application for an order under s 588FM on the alternative basis that the security interests are caught by s 588FL, as security interests arising after the critical time.
2. On this hypothesis, the security interests, having arisen after the critical time, vested in the Companies by operation of s 588FL(4)(b) when they first became enforceable against third parties. Under PPSA, s 20, 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) either the secured party possesses the collateral, or the secured party has perfected the security interest by control, or a security agreement that provides for the security interest covers the collateral in accordance with sub-s (2). Subsection (2) provides that a security agreement covers collateral if it is evidenced in writing signed, or adopted or accepted, by the grantor, and the writing contains, inter alia, a statement that a security interest is taken in all the grantor's present and after-acquired property.
3. As value was given for the security interest, and the Companies had rights in the collateral, the security interest would apparently have attached when it was granted. The Deed of Charge is in writing, and is expressed to be "a fixed charge over all the Debtor's present and future estate, right title and interest in" the "Charged Assets", and "a floating charge over any of the Charged Assets which is not subject to the Fixed Charge", and the "Charged Assets" comprise: "all of the debtor's property, privileges, rights and other assets whether: (a) owned at present or acquired in the future; or (b) held legally or beneficially; or (c) jointly or severally with another party; or (d) beneficially or on trust; or (e) any combination of these."
4. That is a statement to the effect contemplated by s 20(2)(b)(ii), that a security interest is taken in all the grantor's present and after-acquired property. Accordingly, the security interest became enforceable against third parties when it was granted. It follows that, on this hypothesis, the security interest vested in the company immediately upon the charge being granted. This analysis is consistent with that of Davies J in K J Renfrey, holding that where a security interest is registered after the commencement of the winding up or appointment of administrator as the case may be, it would vest in the company on creation, even if registered within twenty business days after the security agreement came into force, unless an order was made under s 588FM. [26]

Alternatively, inadvertence and absence of relevant prejudice?

1. Although, for the reasons given above, it is clear that the "critical time" was 3 February 2014, the application was argued as if the critical time was when the winding up resolution was passed on 27 May 2019. For the sake of completeness I will address, albeit less comprehensively than might otherwise have been appropriate, the issues that were argued on that (incorrect) approach.
2. On that assumption, then at the assumed critical time the security interest was perfected by registration - being the new 2019 Registrations - but the registration time was later than six months before the assumed critical time, and later than twenty business days after the security agreement came into force. Proceeding on the relevant assumptions, then, the latest time at which registration could have taken place without falling within s 588FL(2) would have been six months before the winding up resolution, which is to say before 27 November 2018. That is the context in which the plaintiff had to show, to obtain relief under s 588FM, that the failure to register the collateral earlier (relevantly, before 27 November 2018), was accidental or due to inadvertence or some other sufficient cause (s 588FM(2)(a)(i)); or was not of such a nature as to prejudice the position of creditors or shareholders (s 588FM(2)(a)(ii)); or alternatively that on other grounds it was just and equitable to grant relief (s 588FM(2)(b)).

Inadvertence

1. In Appleyard, it was said: [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 consequence of not doing so."
2. Reference has been made, above, [46] to excerpts from the evidence of Mr Morello, which to my mind plainly establish that National did not advert, prior to April 2019, to the circumstance that the Original AllPAP 6615 Registration had lapsed, and when they did realise it, acted promptly to effect the new 2019 Registrations. In other words, the failure to make the new 2019 Registrations before November 2018 was attributable to inadvertence.
3. The Commissioner submitted, in substance, that there was insufficient explanation as to why the Original AllPAP 6615 Registration had been for three years only. It was submitted that there was no evidence that National relied on the statement in the email of 4 November 2014 that all the registrations had been "with no end date", and that in any event the registration to which that email referred did not in fact include the Original AllPAP 6615 Registration. First, this submission misses the point: the question is not why the original registration was for only three years, but why the new 2019 Registrations were not made before 27 November 2018. Secondly, in the course of cross-examination, Mr Morello repeatedly maintained, credibly, that he had simply trusted his solicitor to do what was appropriate.
4. The Commissioner also submitted that there was no explanation as to why action was not taken earlier, despite concerns about potentially needing to rely on the security arising from late 2018. However, it is not apparent why a secured party in National's position, believing that it had a valid and enforceable security, would upon considering recovery options necessarily or immediately conduct a PPSR search to ascertain whether its security was still registered.
5. In my view, the circumstances as a whole speak very loudly of National simply not adverting to the circumstance that the Original Registration had lapsed, until April 2019. There is, frankly, no other sensible explanation. Had National adverted to the circumstance that the Original Registration had lapsed, then when it became concerned about its position in or about late 2018, it would have made a new registration, just as it did, promptly, when it discovered the position in April 2019.

Absence of relevant prejudice

1. The second ground for relief is that the failure to register the collateral earlier is not of such a nature as to prejudice the position of creditors or shareholders. The prejudice contemplated by this provision is prejudice from the failure to register earlier - not prejudice from making the order. [47] In Accolade Wines, it was explained that the prejudice referred to in s 588FM(2)(a)(ii) being the prejudice to the position of creditors or shareholders from "the failure to register the collateral earlier" - in other words, prejudice attributable to not making a timely registration - to evaluate such prejudice for the purposes of s 588FM one compares the position of the creditors if an extension is granted, with their position if there had been an effective timely registration, and often there will be no difference. [48] That is different from the prejudice arising from "extending the period".
2. It is not apparent how shareholders, or creditors generally, or the Commissioner in particular, were prejudiced by the failure to register the security interest earlier, and in particular, before 27 November 2018. In this case, the Commissioner's debt had accrued, and was converted into a proof in the deed administration, as were the debts of the other creditors, before the security was created. It is just not apparent how registering the security interest earlier - or more accurately, reregistering it after the initial registration lapsed - could have made the slightest difference to the position of creditors generally, or the Commissioner in particular. This is not a case in which creditors traded with the companies during the time that the security interest was unregistered, let alone on the basis that the Companies' assets were not encumbered. When expressly asked, Counsel for the Commissioner could not identify any way in which timely registration (before 27 November 2018) would have resulted in any improvement in the position of creditors generally, or the Commissioner in particular.
3. I am satisfied that the failure to register the collateral earlier was not such as to prejudice the position of creditors or shareholders.

Discretion

1. Those findings enliven the discretion to grant relief, in the sense that once inadvertence, or absence of relevant prejudice, is established, the Court may grant relief, but retains a discretion. Relevant considerations include delay, and prejudice, in particular to the position of unsecured creditors and shareholders.
2. The earlier discussion of questions of delay and prejudice is equally applicable here and produces the same conclusion: those discretionary considerations do not incline me to decline relief.
3. Accordingly, if the case were to be resolved on the basis argued, which assumed that the critical time was 27 May 2019, I would make an order under s 588FM fixing 24 April 2019 - the time of the 2019 Registrations - as the registration time.

Conclusion

1. My conclusions may be summarised as follows:
2. Because the Companies are being wound up, and prior to the winding up resolution were subject to DoCAs which had not been terminated, CORPA, ss 588FL(7)(a), 513B, and 513C, have the effect that the critical time was the day on which the administration, which ended when the DoCA was executed, began, namely 3 February 2014, when the winding up of the Companies is taken to have begun or commenced.
3. CORPA, s 588FL, does not apply to security interests granted by a security agreement made after the critical time. It follows that s 588FL(2) does not apply to the plaintiff's security interests. There is no need for, nor utility in, an order under s 588FM fixing a later time for the purposes of s 588FL(2)(b)(iv).
4. On the alternative hypothesis that the security interests are caught by s 588FL, as security interests arising after the critical time, they vested in the Companies upon their creation. In circumstances where the security interest granted to National was in substitution for a pre-existing interest held by Bibby, where the debt to National refinanced debt previously owed to Bibby, where the transaction was notified by the deed administrators to creditors, who did not object, where it is unthinkable that National would have made the advance without the security, where it is not apparent that the substitution of one secured creditor for another prejudiced the position of the unsecured creditors in any way, and where making an order under s 588FM would leave the unsecured creditors in no different a position to that which would have obtained had Bibby remained the "excluded secured creditor", while not making the order would give unsecured creditors an unintended windfall, to the detriment of the secured creditor, purely as a result of its having taken the security after the administration commenced, when all intended that it have that security, it would be just and equitable, within s 588FM(2)(b), to validate it by fixing 24 April 2019 - the time of the 2019 Registrations - as the registration time.
5. On the further alternative hypothesis, which was the basis on which the case was chiefly though incorrectly argued, that the critical time was 27 May 2019, when the winding up resolution was passed, I am comfortably satisfied that the failure to (re)register its security interest before 27 November 2018 was due to inadvertence, in that no-one on behalf of National adverted to the circumstance that the Original AllPAP Registration had lapsed. I am also satisfied that the failure to register the collateral earlier was not such as to prejudice the position of creditors or shareholders; their position is no different to what it would have been had the security interest been registered before 27 November 2018. Such delay as there has been in registration, or in bringing the proceedings, has not operated to the prejudice of shareholders or unsecured creditors. While granting relief will adversely affect unsecured creditors, by removing from the divisible property of the company and effectively exhausting the deed funds, that is not a consequence of any failure to register the security interest promptly. Making an order under s 588FM would leave the unsecured creditors in no worse a position than would have obtained had National re-registered its interest before 27 November 2018, whereas not making the order would give unsecured creditors an unintended windfall, to the detriment of the secured creditor. In circumstances where there is nothing to suggest that the passage of time has resulted in relevant prejudice to creditors, and where the only "prejudice" is that they will be deprived of the windfall that would accrue to them if National were unsecured, I would not decline relief as a matter of discretion. On this hypothesis also, I would make an order under s 588FM fixing 24 April 2019 as the registration time.

Endnotes

1. In the matter of Antqip Hire Pty Ltd (subject to deed of company arrangement) (in liq) [2020] NSWSC 487 at [118] (Rees J) ("Antqip Hire").
2. MSI (Holdings) Pty Ltd (rec apptd) (in liq) v Mainstreet International Group Ltd [2013] 2 Qd R 253 at 257-258 [23]-[27] (Gotterson JA; White JA agreeing); QCA 27; South Australian Asset Management Corp v Sheahan (1995) 65 SASR 59 at 65-66; 17 ACSR 569 at 576 (Doyle CJ; Duggan J and Nyland J agreeing); Re Leslie Homes (Aust) Pty Ltd (1984) 8 ACLR 1020 at 1022 (McLelland J); 2 ACLC 554.
3. Cf In the matter of Duke Contracting Australia Pty Ltd [2017] NSWSC 767 at [9], [22] (Brereton J).
4. PPSA, s 21(2)(a).
5. PPSA, s 163(1)(a).
6. [2020] FCA 1692.
7. Blayney Crane Services at [76]-[78] (Gleeson J).
8. (2017) 120 ACSR 117; [2017] FCA 325.
9. Blayney Crane Services at [63] (Gleeson J).
10. (2017) 93 NSWLR 611; 118 ACSR 307; [2017] NSWSC 21 ("OneSteel").
11. OneSteel at 634 [69]-[70], 635 [72]-[74] (Brereton J).
12. K J Renfrey at 124 [15] (Davies J).
13. K J Renfrey at 124-125 [20] (Davies J).
14. K J Renfrey at 125-126 [24] (Davies J).
15. Blayney Crane Services at [79] (Gleeson J).
16. Re Carpenter International Pty Ltd (admins apptd) (2016) 51 VR 190 at 215 [94]-[95] (Cameron J); 111 ACSR 477; [2016] VSC 118 ("Carpenter").
17. PPSA, s 19(1).
18. PPSA, s 18(3).
19. See below at [70].
20. Carter v New Tel Ltd (in liq) (2003) 44 ACSR 661 at 665 [16]-[17] (Austin J); [2003] NSWSC 128. It is unnecessary to determine whether, if such an application were made, the Deed of Charge would be an exempt disposition, but as it appears that it was made "under" a DoCA, it would appear to be so.
21. [2016] FCA 972.
22. [2017] FCA 818 at [21] (Besanko J).
23. [2017] FCA 1144 at [60]-[64] (Markovic J).
24. [2019] FCA 35 at [65] (Greenwood J).
25. [2020] FCA 417 at [35] (Gleeson J).
26. K J Renfrey at 126-127 [26] (Davies J).
27. K J Renfrey at 127-128 [28]-[29] (Davies J).
28. OneSteel at 634 [69] (Brereton J).