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[2025] NSWSC 1075
General information, not legal advice.
Supreme Court of NSW
2025-09-19
Black J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of Dartbrook Commercial Pty Ltd [2025] NSWSC 1075
Hearing dates: 10, 15 September 2025
Date of orders: 19 September 2025
Decision date: 19 September 2025
Jurisdiction: Equity - Corporations List
Before: Black J
Decision: Parties to bring in short minutes of order to give effect to this Judgment.
Catchwords: CORPORATIONS — debentures, charges and mortgages — extension of time for registration — where security interests incorrectly registered — inadvertence — where company subsequently entered voluntary administration — whether extension of time should be granted to register corrected security interests
Legislation Cited: - Corporations Act 2001 (Cth), ss 419A, 588FL, 588FM - Personal Property Securities Act 2009 (Cth), ss 12(3), 13, 14(1)(c), 19, 20, 21, 55, 62(3), 267(2), 293(1)(a)
Cases Cited: - Chand v Azurra Pty Ltd (in liq) (2011) 82 ACSR 383; [2011] NSWCA 58
- Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd (2003) 135 FCR 206; [2003] FCAFC 256
- Palmanova v Commonwealth [2025] HCA 35
- Re Accolade Wines Australia Ltd [2016] NSWSC 1023
- Re Appleyard Capital Pty Ltd; 123 Sweden AB v Appleyard Capital Pty Ltd (2014) 101 ACSR 629; [2014] NSWSC 782
- Re Cardinia Nominees Pty Ltd [2013] NSWSC 32
- Re Dairy Soils Pty Ltd (in liq) [2025] VSC 540
- Re 4 in 1 Wyoming Pty Ltd & Companies Listed in - Schedule A to Originating Process (2017) 120 ACSR 167; [2017] NSWSC 407
- Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337; [2013] NSWSC 852
- Re 100% Plumbing Maintenance Pty Ltd [2021] NSWSC 103
Category: Principal judgment
Parties: Mine and Tunnel Constructions Pty Ltd (Plaintiff)
Dartbrook Commercial Pty Ltd (admins apptd) (recs and mgrs apptd) (First Defendant)
Ben Campbell (as Receiver and Manager of Dartbrook Commercial Pty Ltd) (Second Defendant)
David McGrath (as Receiver and Manager of Dartbrook Commercial Pty Ltd (Third Defendant)
Timothy Joseph Heenan (as Administrator of Dartbrook Commercial Pty Ltd) (Fourth Defendant)
Richard John Hughes (as Administrator of Dartbrook Commercial Pty Ltd (Fifth Defendant)
Representation: Counsel:
TD Castle SC / I King (10 September), D Levi (15 September) (Plaintiff)
J Hynes (Second and Third Defendant)
Solicitors:
Connor & Co Lawyers Pty Ltd (Plaintiff)
Gilbert + Tobin (Second and Third Defendants)
File Number(s): 2025/306192
By Originating Process filed on 11 August 2025, the Plaintiff, Mine and Tunnel Constructions Pty Ltd (“MTC”) seeks relief under s 293(1)(a) of the Personal Property Securities Act 2009 (Cth) (“PPSA”) and s 588FM of the Corporations Act 2001 (Cth) (“CA”). Messrs Campbell and McGrath as receivers appointed to Dartbook’s assets and undertakings (“Receivers) and Messrs Heenan and Hughes as voluntary administrators of Dartbrook were joined as Defendants in the proceedings, but only the Receivers took an active role.
Broadly, MTC originally sought orders extending the time for further registrations of security interests made on 30 July 2025 (“30 July Registrations”) or now to make further new registrations of security interests in relation to two mining machines (together, “Machines”) leased by it to the First Defendant, Dartbrook Commercial Pty Ltd (admins apptd) (recs and mgrs apptd) (“Dartbrook”), in place of the initial registrations (together, “First Registrations”) that it had made of those security interests. MTC already has a subsisting registered security interest in respect of one of the Machines (“MOB065”) leased to Dartbrook. Its security interest in the second Machine (“MOB017”) vested in Dartbrook when voluntary administrators were appointed to Dartbrook. The underlying commercial dispute between the parties at least extends to Dartbrook’s and the Receivers’ liability under CA s 419A(2) for amounts payable by Dartbrook or the Receivers pursuant to a Hire and Services Agreement (“HSA”) in respect of the Machines. I will address the issues in respect of the two Machines sequentially below, where they raise distinct issues.
Mr Castle, with whom Ms King (on the first day of the hearing) and Ms Levi (on the second day of the hearing) appeared for MTC, reformulated the orders sought by MTC in his closing submissions on the first day of the hearing, seeking to address difficulties which had been raised by the Receivers as to the form of those orders and again reformulated them when the matter continued into a second hearing day to seek relief in respect of the First Registration as to MOB017 or alternatively as to the 30 July Registrations. In further submissions made on the second day of the hearing, Mr Castle then foreshadowed a further change to the form of the orders sought by MTC, possibly to return them to the form they had previously taken or possibly to change them to a new form that had not then emerged. I did not entertain that further change, where the just, quick and cheap resolution of the real issues in dispute in the proceedings required that there exist, at least at the point of closing submissions, a stable basis on which the Defendants could respond to the relief sought by MTC position and the Court could determine the matter. I will return to the difficulties arising from that matter below.
I first set out a chronology of events, which is uncontroversial, before turning to the affidavit evidence.
On 19 January 2024, Vitol Asia Pte Ltd (“Vitol”), Dartbrook and other parties entered into a Loan Note and Subscription Agreement (“Senior LNSA”) pursuant to which Vitol agreed to lend to USD 60 million to Dartbrook under a prepayment facility. Section 5 set out the conditions of utilisation of the facility. Section 21.5 contained a negative pledge, which provided that Dartbrook would not create or permit to subsist any Security (as defined) over any of its assets, other than Permitted Security Interests. The term “Permitted Security Interest” in that agreement included any security under retention of title, hire purchase or conditional sale arrangements or arrangements having similar effect in respect of goods supplied to Dartbrook in the ordinary course of ordinary trading and on the supplier’s standard or usual terms (or on terms more favourable to Dartbrook) so long as the debt it secures is paid when due or contested in good faith and appropriately provisioned. There is no suggestion that the arrangements between Dartbrook and MTC would not have been permitted security interests within that clause, at the time they were created. Conditions precedent to initial utilisation included a requirement for a schedule of all registrations on the Personal Property Securities Register (“PPSR”) in respect of, relevantly, Dartbrook and its assets and confirmation from Dartbrook that each registration is a Permitted Security Interest. There is no reason to think that that confirmation could not have been given, or was not given, by Dartbrook in respect of its subsequent arrangements with MTC.
Also on 19 January 2024, Global Loan Agency Services Australia Specialist Activities Pty Ltd (as security trustee) (“GLAS”), Dartbrook and others entered into a Security Trust Deed together with a General Security Deed (“GSD”) which secured what was owing by Dartbrook under the Senior LSNA. Clause 2.1 of the GSD provided that, relevantly, Dartbrook granted security over all of its “Secured Property” as defined (Ex D1, CB 658, 661). Clause 2.2 of the GSD provides that “each security interest granted by [Dartbrook] under this deed takes priority over all other Security Interests of that Grantor over the Secured Property other than Security Interests Mandatorily preferred by law”.
On 20 January 2024, the security interest taken by GLAS under the GSD was registered, with the collateral described in the PPSR as follows:
“All present and after-acquired property except any personal property of the grantor which is not from time to time subject to a security agreement in favour of the secured party. The collateral may include inventory and may be subject to control…”.
That description rightly recognised that certain property of Dartbrook did not fall within the scope of that security. Substantial drawdowns under the Senior LNSA and the Subordinated LNSA occurred between 23 January 2024 and 25 June 2025.
On 18 April 2024, MTC entered into the HSA (Ex P1, CB 55) with Dartbrook for the lease of MOB017 to Dartbrook for a period of 36 months. The recitals to the HCA recorded that Dartbrook requires the hire of certain items of equipment or on hire; MTC is in the business of lending that equipment and Dartbrook wanted to hire the equipment from MTC; and MTC had agreed to make the equipment available for hire to Dartbrook on the specified terms and conditions. Clause 6 recorded that the equipment at all times remained the property of MTC and that MTC would maintain a registered security interest in the equipment.
By an agreed variation of that contract dated 15 May 2024 (Ex P1, CB 107), MTC agreed to supply an additional continuous miner, MOB065, to Dartbrook in accordance with the HSA with an agreed value of AUD$4,750,000 and a lease term of 36 months. On 24 July 2024, Dartbrook took delivery of MOB065.
MTC’s security interest in respect of MOB065 was registered on the PPSR on 7 August 2024 (“MOB065 First Registration”) (Ex P1, CB 159), but MTC did not nominate it as a purchase money security interest (“PMSI”) and did not indicate that the security interest also covered inventory attached to MOB065. The secured party was recorded, in error, as Mine and Tunnel Equipment Pty Ltd (“MTE”) as well as MTC but no serious submission was put by the Receivers that that had any impact upon the efficacy of the registration.
On 9 October 2024, the Senior LNSA further amended by an Amendment Deed (Ex D1, CB 703) and Vitol and Dartbrook entered into a Subordinated Loan Note and Subscription Agreement (“Subordinated LNSA”) providing a further $10 million facility to Dartbrook.. On 6 November 2024, PPSR searches were undertaken by Vitol’s solicitors in respect of, inter alia, Dartbrook and a related entity, which disclosed a non-PMSI registration for MTC and MTE in respect of MOB065. Vitol subsequently advanced funds to Dartbrook under the Subordinated LNSA with the first utilisation occurring on 13 February 2025.
On 18 December 2024, Dartbrook took delivery of MOB017. MTC did not register its security interest in respect of MOB017 until 17 April 2025 (“MOB017 First Registration”). That security interest was not registered as a PMSI and MTC did not nominate that the security interest also covered inventory. The registration also recorded both MTC and MTE as secured parties.
Vitol’s solicitors conducted further PPSR searches on behalf of Vitol on 14 May 2025 which revealed non-PMSI registrations in respect of MOB065 and MOB017 and Vitol subsequently made further advances to Dartbrook. Vitol’s solicitors also made further searches on 26 June 2025 which revealed the same details as the searches conducted on 14 May 2025 in respect of MOB065 and MOB017. Vitol was provided, by its solicitors, with a registration summary which disclosed, unsurprisingly, that Dartbrook was subject to many security arrangements, including PMSI security arrangements, over many kinds of equipment (Ex D1, CB 1321). That schedule recorded the security interests held by MTC but did not record them as PMSIs, although a person who was reviewing that schedule would only have noticed that matter if he or she had undertaken a close review of multiple registrations over several pages and there is no evidence that any executive of Vitol had done so. There is no reason to think that the disclosure of two more PMSI arrangements then or later, in respect of MOB065 and MOB017, would have made the slightest difference to Vitol’s decision-making. Subsequent amendments were made to the LNSA, including by a fourth senior LNSA amendment letter dated 24 June 2025 (Ex D1, CB 1483).
On 3 July 2025, voluntary administrators were appointed to Dartbrook under CA s 436A and the Receivers were also appointed by GLAS to Dartbrook’s assets. That date is the “critical time” for the purposes of the statutory provisions that I address below.
On 7 July 2025, MTC made further registrations in respect of spare parts for MOB065 and MOB017.
By a letter dated 25 July 2025 from the Receivers to MTC, the Receivers referred to the First Registrations of the security interests respectively made on 7 August 2024 and 17 April 2025 in respect of MOB065 and MOB017 respectively and to the two further registrations made on 7 July 2025. The Receivers expressed the view that another security interest, implicitly the security interest held by GLAS as trustee for Vitol, the Receivers’ appointor, may take priority over MTC’s security interest in MOB065 and that MTC’s security interest in MOB017 vested under CA s 588FL(4) and that any security interests held by MTC in spare parts had vested in Dartbrook under PPSA s 267(2). The Receivers there accepted that the MOB065 First Registration may have been made within 15 business days of Dartbrook obtaining possession of MOB065, so as to satisfy one element of PPSA s 62(3), but pointed out that the registration stated that the relevant security interest was not a PMSI, so that PPSA s 62 did not apply and the priority of that security interest was to be determined by the default priority rules in PPSA s 55. The Receivers also there contended that the MOB017 First Registration, on 17 April 2025, was made more than 20 business days after the security interest in MOB017 came into force, and less than six months before the voluntary administrators were appointed to Dartbrook on 3 July 2025 and contended that that security interested had vested in Dartbrook by reason of CA s 588FL(2). The Receivers also there contended that GLAS’s security interest had priority over MTC’s security interest in MOB017. The Receivers further contended that MTC’s further registrations made on 7 July 2025 were after the appointment of the voluntary administrators to Dartbrook and any security interest in spare parts was unperfected and vested in Dartbrook by reason of PPSA s 267(2). The Receivers then stated that:
“In the meantime, and given the conclusions reached above, I confirm that [Dartbrook] will not pay any rental or other amounts in respect of that property.”
“I say that [MTC’s] security interests … should each have been registered as a [PMSI] on the [PPSR]; I have today corrected that matter by registering new security interests … on the PPSR. …
[MTC] intend[s] to make an application to the Supreme Court of New South Wales next week in accordance with section 293 of the [PPSA] in relation to those matters…”
MTC read the affidavit dated 8 August 2025 of its financial controller, Mr Pant, who referred to the nature of MTC’s business, the role played by its former solicitors in respect of financing transactions, the delivery of MOB065 and MOB017 to Dartbrook and registration of the relevant security interests. Mr Pant’s evidence is that MTC specialises in leasing, repairing and consulting on underground mining and civil tunnelling machines; it owns the largest fleet of underground mining machines in Australia; and it has about 20 employees, largely involved in its heavy machinery activities, and does not have an in-house lawyer. Mr Pant refers to the entry into the HSA in respect of MOB017 and its extension to the lease of MOB065 by a variation agreement dated 19 June 2024.
Mr Pant refers to the fact that MTC’s former solicitor had trained MTC’s staff as to the need to register hire and services agreements on the PPSR. His evidence is that he does not recall that that solicitor instructed staff to register those agreements as a PMSI or as to the time limit for registration of that equipment as a PMSI. I accept Mr Pant’s evidence as to that matter, where it is consistent with the document he was provided at that training, which is annexed to his second affidavit (Ex P2, CB 199A–199Y) and where he was not cross-examined to challenge that evidence. Mr Pant’s evidence is also, and I also accept, that he did not know that the registration of a security interest as a PMSI would secure MTC’s first ranking security interest over its equipment until he retained MTC’s current solicitors in relation to the issues that had arisen concerning MOB065 and MOB017. His evidence is that, to save on legal fees, he sometimes registered MTC’s security interests on the PPSR without the assistance of MTC’s former solicitors, by copying what they had been done for earlier registrations, and that he had done so in this matter. He also did not select “inventory” when registering the security interests for MOB065 and MOB017 on the PPSR and did not appreciate that that had the result that the registration did not extend to associated equipment and spare parts. He also did not tick the box for registration of the agreements as a PMSI because MTC’s former solicitor had not done so for earlier agreements in earlier registrations.
Mr Pant also addresses the circumstances of the delivery of MOB065 to Dartbrook and the MOB065 First Registration on 7 August 2024 and the delivery of MOB017 on 18 December 2024 and the MOB017 First Registration on 17 April 2025. His evidence (Pant 8.8.25 [45]) is that:
“Regrettably I did not register that security interest within 15 business days of the delivery of MOB 017 as I was not aware that I had to do so within that time frame for MTC to perfect the registration of its security interest on the PPSR. Nor was I aware of the significance of failing to do so within that time frame.”
His evidence is also that he again copied previous security registrations done by MTC’s former solicitor and made several errors in respect of the MOB017 First Registration by doing so, by failing to register the security interest as a PMSI; failing to do within 15 days of the delivery of MOB017 to Dartbrook and failing to elect or nominate that the security interest also covered inventory attached to MOB017 including spare parts. Mr Pant also refers to his subsequent steps to register a security interest over the spare parts for MOB065 on 7 July 2025, but says that he again copied earlier security registrations and failed to register that interest as a PMSI or to do so within 15 business days of MTC’s delivering the spare parts to Dartbrook.
Mr Pant also refers to the letters dated 25 July 2025 and 30 July 2025 exchanged between the Receivers and MTC and between MTC’s solicitors and the Receivers which I have addressed above. He notes that, on 30 July 2025, MTC’s new solicitor made the 30 July Registrations over MOB065 and MOB017 and their spare parts. His evidence is that the value of MOB065 is approximately $4.75 million, the value of MOB017 is approximately $5 million and the value of share parts in respect of the machines is nearly $230,000. He also notes that MTC is owed outstanding hire fees under the HSA and the Variation Agreement in an amount in excess of $548,000 (Pant 8.8.25 [56]). I will return to that matter below.
By his second affidavit dated 26 August 2025, Mr Pant leads further evidence as to the training provided to MTC staff by MTC’s former solicitors in respect of the registration process under the PPSR and (as I noted above) exhibited (Ex P2, CB 199A–199Y) the slides he was provided for training which contained his handwritten notes from that training. It is plain that those slides did not sufficiently draw attention to the significance for MTC of registration of a security interest arising from machine hire agreements as a PMSI. By a third affidavit dated 8 September 2025, Mr Pant refers to an email dated 10 July 2025 sent by the Receivers seeking information as to security interests.
MTC also read affidavits dated 8 August 2025, 11 August 2025, 25 August 2025 and 29 August 2025 of its new solicitor, Mr Connor, which, broadly, set out the history of the registration of security interests by MTC.
MTC also tendered an extract from the affidavit dated 11 August 2025 of the Receivers’ solicitor, Ms Whitby (Ex P4, CB 344) which was not read by the Receivers which recorded that she was informed by one of the Receivers, Mr McGrath, that:
“(a) Along with other machines, MOB 017 and MOB 065 are currently being used in operations at the Dartbrook Mine. …
(b) MOB 017 and MOB 065 are two of three underground mining machines currently being utilised at the Dartbrook Mine. They are critical to the operations of the Dartbrook Mine and without access to the machines, the Dartbrook Mine would not be able to continue to operate; and
(c) MOB 017 and MOB 0645 are currently mining coal from the Dartbrook Mine which is being processed through the coal handling and preparation plant (CHPP), together with aged coal from a Coal Stockpile that is the primary circulating asset of the Dartbrook Companies. Coal processed through the CHPP is then loaded onto trains for sale to customers. Absent the fresh coal being mined by these two machines, processing of the Coal Stockpile would take longer and be less cost efficient.”
“[Dartbrook] has continued to use MOB 065 and MOB 017 from the date of the Receivers’ appointment until at least the date of this affidavit. …
From our investigations conducted to date as Receivers, it is uncertain whether the secured lenders will be repaid in full their loans secured by GLAS’ security interest.”
MTC also tendered the Environmental, Social and Governance Report 2024 of Vitol (Ex P6) and a document recording Vitol’s history (Ex P7). Those documents demonstrate Vitol is a substantial entity but that does not advance any question which I need to determine in these proceedings. The Plaintiffs also tendered information as to the role played by several executives within Vitol, who were involved in the entry into the relevant loan agreements (Ex P8), who did not give evidence in the Receivers’ case.
The Receivers read the affidavit dated 25 August 2025 of Mr Papadolias, a solicitor in the law firm which acted for Vitol in respect of the provision of secured financing to Dartbrook and now acts for the Receivers in these proceedings. Mr Papadolias referred to the entry into the Senior LMSA between Vitol and Dartbrook, the entry into the HSA and Variation Agreement between Dartbrook and MTC, and the entry into an Amendment Deed dated 9 October 2024 and a Subordinated LMSA on 9 October 2024 between Vitol and Dartbrook. Mr Papadolias also outlined the process taken by his firm to review the PPSR in connection with conditions precedent to the financings by Vitol and to report to Vitol with the information obtained from that review. Appropriately, Mr Papadolias did not seek to give evidence as to what, if any, review Vitol undertook of the information that his firm provided to it. Mr Papadolias did seek to give evidence, largely admitted as submission under s 136 of the Evidence Act 1995 (NSW), of suggested “prejudice” said to arise from the advances made by Vitol, at a time the PPSR did not disclose that MTC’s security interests were PMSIs. That evidence did not significantly advance the Receivers’ case, absent evidence that a disclosure of the status of those Security Agreements as PMSIs would have had any impact on Vitol’s decision-making. It was apparent from Mr Papadolias’ cross-examination that he could not, and did not seek to, give evidence that the lack of disclosure on the PPSR that the security interests relating to MOB065 and MOB017 were PMSIs had any impact, let alone any material impact, on Vitol’s decision-making in respect of its loan facilities to Dartbrook.
It is also plain that, as Mr Papadolias accepted in cross-examination, the decisionmakers in respect of the loan facility with Vitol included several of its executives and, likely, its credit committee. Those executives did not give evidence indicating that the lease arrangements between MTC and Dartbrook or whether they were PMSIs had any impact upon Vitol’s decision-making. There is no reason to infer that would have had any relevance to that decision-making, where their commercial effect was that Dartbrook acquired access to mining equipment which was necessary to its ongoing operations and paid rental to do so. It is not necessary to draw an inference that their evidence would not have assisted the Receivers in respect of that matter, because the fact is that it was not led and there is no evidence that would suggest that non-disclosure that those arrangements were PMSIs or any delay in their registration had any impact on Vitol’s decision-making.
The Receivers tendered, for completeness, documents recording the advances made by Vitol to Dartbrook (Ex D2), after MTC took an unmeritorious objection to the form of evidence that the Receivers had led as to the fact of those advances. There was never any genuine dispute as to the fact that substantial advances were made by Vitol to Dartbrook and It is not necessary to determine any further question as to the amount of those advances in order to determine these proceedings.
“The abovementioned PPSR registrations made on 7 August 2024 [for MOB065] and 17 April 2025 [for MOB017] (“First Registrations”) are not capable of being cured in relation to their failure to nominate their status as being a PMSI.”
A footnote to that submission explains that:
“A financing statement must be in the approved form: PPSA s 150(2), (3). The ‘approved form’ (see PPSA s 302) does not permit the correction of the PMI status in an existing registration: see PPSR statement [update a PPSR registration’] under the heading ‘Details you can’t change’ …”
MTC then made a further registration in respect of spare parts for MOB065 on 7 July 2025 and subsequently made the MOB065 30 July Registration, which recorded MTC’s interest in MOB065 and associated inventory as a PMSI, after the critical time. Mr Castle acknowledges that the MOB065 30 July Registration is not effective without an extension of time ordered by the Court under PPSA s 293 and CA s 588FM.
Dealing first with the position under the PPSA, MTC now seeks an order under PPSA s 293(1) extending the time for the MOB065 30 July Registration by the necessary number of business days to allow it to make that registration within a period ending seven days after the date of the determination of this application, although MTC already has the MOB065 First Registration on the PPSR, which does not identify the relevant interest as being a PMSI. MTC contends that it is just and equitable to extend the time for the MOB065 30 July Registration, because, by inadvertence, it did not make the MOB065 First Registration within the time needed to register a PMSI or register its interest as a PMSI.
Turning to the applicable provisions, a “security interest” includes, under PPSA s 12(3), the interest of a lessor under a PPS Lease. The term “PPS Lease” is in turn defined under the PPSA as including a lease of goods for a term of more than two years, and it is common ground the lease of MOB065 and MOB017 falls within that category. Section 19 of the PPSA in turn provides that a security interest is enforceable against a grantor, relevantly Dartbrook, in respect of particular collateral (relevantly MOB065) only if the security interest has attached to the collateral, and s 19(2) sets out the circumstances in which a security interest attaches to collateral. Paragraph 19(2)(a) provides that a security interest attaches when the grantor has rights to the collateral, and s 19(5) provides that, for the purposes of that paragraph, a grantor has rights in goods that are leased under a PPS Lease when it obtains possession of the goods. There is no dispute that Dartbrook obtained possession of MOB065 and the security interest attached to it on its delivery to Dartbrook.
Section 20 of the PPSA in turn provides that security interest is enforceable in respect of the particular collateral if the security interest is attached to the collateral, as occurred here, and, relevantly, a security agreement that provides for the security interest covers the collateral in accordance with s 20(2). There is no dispute that that requirement is also satisfied here. Section 21(1) of the PPSA provides that a security interest in collateral is perfected if a security interest is attached to the collateral, relevantly MOB065, that security interest is enforceable against a third party and s 21(2) applies. Subject to the matters addressed below, that section applies because a registration is effective with respect to the collateral here, although that registration does not presently describe the relevant security interest as a PMSI.
Broadly, s 55(4) of the PPSA provides that priority between two or more security interests in collateral that are currently perfected is to be determined by the order in which the priority time for each security interest occurs and, for security interests perfected by registration, the priority time is the registration time for the collateral. Section 62 of the PPSA provides for when a PMSI has priority over a perfected security interest granted by the grantor over the same collateral that is not a PMSI. Section 62(3) provides that a PMSI has priority if, relevantly, it is an interest in personal property other than inventory and the PMSI is perfected by registration before the end of 15 business days after, relevantly, the grantor obtains possession of the property. Mr Castle rightly recognises that the MOB065 First Registration was made within the 15 business day period required to register a PMSI but was not registered as a PMSI, so that a security interest exists in relation to MOB065 but may rank after security interests of Vitol by reason of PPSA s 55(4).
Section 293(1) of the PPSA in turn provides that the Court may make an order extending the number of business days specified in s 62(3)(b) for the perfection of a PMSI if the Court is satisfied that it is just and equitable to do so. When considering whether to grant relief under s 293(1)(a), the Court must take into account the matters set out at PPSA s 293(3) as follows:
“(a) whether the need to extend the period arises as a result of an accident, inadvertence or some other sufficient cause;
(b) whether extending the period would prejudice the position of any other secured parties or other creditors;
(c) whether any person has acted, or not acted, in reliance on the period having ended.”
Mr Castle refers to the concept of “inadvertence” adopted in PPSA s 293(3)(a) and CA s 588FM(2)(a)(i), and addressed in Re Cardinia Nominees Pty Ltd [2013] NSWSC 32 at [15] (“Cardinia Nominees”); Re Appleyard Capital Pty Ltd; 123 Sweden AB v Appleyard Capital Pty Ltd (2014) 101 ACSR 629; [2014] NSWSC 782 at [10] (“Appleyard Capital”); and Re 100% Plumbing Maintenance Pty Ltd [2021] NSWSC 103 at [15] (“100% Plumbing”) as including a “failure to advert to or understand the requirement for registration within the specified period, and innocent error in the sense of failure to register through ignorance of the legal requirement to do so, or of the consequences of not doing so.”
In Cardinia Nominees at [15], I observed that:
“‘inadvertence’ may also be established where a party operates under a mistake as to the consequences of failing to register a security interest: Sanwa Australia Finance Ltd v Ground-Breakers Pty Ltd (in liq) [1991] 2 Qd R 456 at 461 ; (1990) 2 ACSR 692 at 695; National Australia Bank Ltd v Davis & Waddell (Vic) Pty Ltd [2003] VSC 1 ; (2003) 44 ACSR 296; Metcash Trading Ltd v 8 Nai Investments Pty Ltd [2011] FCA 1400 at [8]. The approach adopted in the case law of treating a matter of that kind as amounting to inadvertence is consistent with the emphasis placed in the case law upon the benevolent operation of predecessor sections, at least where an error of a secured creditor in not attending to registration of its security within time is innocent and does not result from any disregard of its statutory obligations: R**e Kris Cruisers Ltd above at 142; National Australia Bank v Davis & Waddell above at [67].”
“‘inadvertence’ includes failure to advert to or understand the requirement for registration within the specified period, and innocent error in the sense of failure to register through ignorance of the legal requirement to do so, or of the consequences of not doing so.”
Mr Castle submits, and I accept, that Mr Pant’s evidence establishes inadvertence in the relevant sense in respect of the First Registrations, for the reasons that I have noted above in dealing with his evidence.
In considering the question of prejudice to other creditors and reliance by other persons, for the purposes of PPSA s 293(3)(b)–(c), I bear in mind that a PMSI holder ordinarily has the benefit of priority as against competing perfected security interests in the same collateral, in accordance with PPSA s 62(1), irrespective of a competing security interest holder’s awareness, consent or otherwise regarding the grant of the PMSI, provided that PPSA s 62(2) or 62(3), as the case may be, has been complied with. In Re Accolade Wines Australia Ltd [2016] NSWSC 1023 at [27] (“Accolade Wines”), in considering PPSA s 293(3)(b), Brereton J observed that:
“As to the prejudice referred to in s 293(3)(b), neither the researches of counsel, nor mine, have revealed any direct authority on s 293. The authorities on [CA], s 588FM, and its predecessors provide some assistance, but, there is an important distinction. As explained in Appleyard Capital, in s 588FM(2)(a)(ii), the prejudice referred to is 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. That means that, to evaluate 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; often there will be no difference. However, the prejudice referred to in s 293(3)(b) is prejudice from extending the period. This directs attention not to the impact on other secured parties or creditors of the delay in registration, but to the impact of making an order extending the period; to evaluate prejudice for that purpose, one compares the position of creditors if an extension is granted, with their position if no extension is granted, and usually there will be a difference because priorities will be disturbed.”
“Whether granted before or after the initial registrations, those [All present and after acquired property (“AllPAP”)] security interests are now entitled to priority over the Plaintiffs’ PMSIs. If an order is made under s 293(1) extending the period for registration of the Plaintiffs’ PMSIs, the AllPAP holders will lose that priority in respect of the particular collateral which is the subject of the Plaintiffs’ PMSIs. It follows that they will be prejudiced by extending the period.”
“… Appleyard Capital explained that in the context of s 588FM, prejudice to other creditors could not be conclusive because otherwise an order would never be made in any case in which it mattered: in any case where an extension was of utility, there would inevitably be prejudice by removing the collateral from the pool available to satisfy unsecured creditors generally, and enabling that result was the fundamental purpose of the provision. The same applies here: the essential purpose of granting an extension is to reinstate the priority to which a PMSI would otherwise be entitled over prior AllPAPs (as it will in any event have priority over later AllPAPs), and thus in any case in which the remedy is of any practical utility, there will be prejudice to a prior AllPAP holder.”
“It has been said that an AllPAP is always liable to be trumped, in respect of specific after-acquired collateral, by a PMSI in respect of that collateral and to the extent that an Earlier AllPAP holder will be prejudiced, it is only by losing a windfall arising from inadvertence: Accolade Wines at [52(2)-(3)].”
“In circumstances where:
(1) there was a registration, which was recorded on the PPSR, albeit a defective one because it was against the Grantors’ ABN, not ACN;
(2) the PMSIs are each in respect only of the specific collateral to which the relevant lease relates;
(3) an AllPAP is always liable to be trumped, in respect of specific after-acquired collateral, by a PMSI in respect of that collateral;
(4) to the extent that an Earlier AllPAP holder will be prejudiced, it is only by losing a windfall arising from inadvertence;
(5) it is very likely that any Later AllPAP holder in fact had notice of the Plaintiffs’ PMSI when acquiring its security interest; and in any event, notice that there was an earlier PMSI in respect of specific collateral is unlikely to have been material to its decision to provide financial accommodation and take the AllPAP security.”
Mr Castle acknowledges the relevance of prejudice in the exercise of the Court’s discretion to extend the time for registration under, relevantly, PPSA s 293(3). He rightly submits that the Receivers bear the evidentiary onus of establishing any relevant prejudice. He submits that the security interest held by GLAS, as security trustee for Vitol, did not extend to the Machines because they were Permitted Security Interests under the Senior LNSA and not within the scope of the security over all present and after acquired property taken by GLAS for the benefit of Vitol. It is not necessary to determine that question, where neither GLAS nor Vitol has established either prejudice or reliance in respect of MOB065 where there is no evidence that GLAS or Vitol would have acted any differently, in any relevant respect, had the MOPB065 First Registration extended to inventory or identified that the relevant security was a PMSI.
After I take into account these matters as PPSA s 293(3) requires, the more difficult issue for MTC is whether it is just and equitable to grant that relief sought for the purposes of PPSA s 293(1), where that would validate the MOB065 30 July Registration and bring about a new registration that is inconsistent with the MOB065 First Registration. Mr Castle submits that:
“If the inadvertence had not occurred, MTC would have had valid PMSIs and “super priority” over its Machines, and there would have been no basis for the Receivers to refuse to pay for their continued use.”
I will return below to the question whether there is a basis for the Receivers to refuse to pay for their continued use of the Machines in any event. Mr Castle also refers to the familiar observation that the Courts have adopted a beneficial approach to applications for an extension on the grounds of inadvertence.
“A further factor in relation to the ‘just and equitable’ evaluation is that refusal of the extension sought may lead to further litigation, arising from the Receivers’ refusal to pay for the use of the Machines … Given the ‘critical’ role being played by the Machines … future disputes involving the Machines would not be in the interests of other creditors of [Dartbrook] in terms of potential risks to the sale process foreshadowed by the Receivers. …”
I am not persuaded that these matters support the relief sought, where the Receivers’ not paying rent for the use of the Machines may readily be addressed by the determination of their application under CA s 419A which I address below.
“there is no legislative intention that can be discerned to create any “gaps” between the operation of the remedial provisions in PPSA and the CA, where, as here, [MTC] had perfected security interests at the ‘critical time’ such that the intention of the remedial power in PPSA s 293 would be frustrated by a want of power under CA s 588FM”.
I do not find the use of the term “gap” helpful where it assumes there is something missing, as distinct from limits drawn by the terms of the statutory provisions with the necessary consequence that they apply in some circumstances and not in others. I bear in mind that any statutory provision is, necessarily, limited in scope and there are necessarily applications which will fall within and outside that scope.
Mr Castle also drew attention to the approach to statutory construction identified by the High Court in Palmanova v Commonwealth [2025] HCA 35 at [4]–[6], to which I have regard. Mr Castle also addressed, at some length, the previous decision of the Full Court of the Federal Court in Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd (2003) 135 FCR 206; [2003] FCAFC 256, which was directed to the operation of the provisions preceding the current legislation. Again, I have had regard to Mr Castle’s submissions as to these matters which do not seem to me substantially to advance any issue that I need to decide.
Mr Hynes, for the Receivers, refers to the circumstances in which Vitol, Dartbrook and other parties entered into financing agreements, to the terms of those financing agreements and to MTC’s entry into the HSA with Dartbrook in respect of MOB017 and the extension of that facility to include MOB065. Mr Hynes refers to the PPSR searches undertaken by Vitol’s solicitors in respect of Dartbrook for the purposes of satisfying a condition precedent under the Subordinated LNSA and to the fact that those searches disclosed the MTC’s security interest in relation to MOB065 and did not disclose a registration identifying MOB017. Nothing turns upon those searches where there is no evidence that Vitol had any regard to their outcome in proceeding with subsequent advances to Dartbrook. Mr Hynes also refers to further searches undertaken by Vitol’s solicitors on 19 May 2025 which revealed non-PMSI registrations in respect of MOB065 and MOB017 and to subsequent advances made by Vitol. Again, nothing turns on those searches or further searches undertaken on 26 June 2025, where there is no evidence that Vitol then had any regard to the treatment of security interests taken by MTC in determining whether to make subsequent advances to Dartbrook or that disclosure that MTC’s interests were PMSIs would then have had any impact upon Vitol’s decision-making.
Mr Hynes points to several suggested difficulties with the initial form of relief sought by MTC which have been partly addressed by subsequent orders formulated by MTC. Mr Hynes also advances several other criticisms of the form of registrations made by MTC but does not explain why those criticisms have any adverse impact upon the validity of the registrations. Mr Hynes submits that MTC has failed to discharge the onus that it bears to adduce appropriate evidence of accident or inadvertence from the person responsible for the First Registrations. I do not accept that submission, where Mr Pant’s evidence seems to me amply to demonstrate error and inadvertence in making those First Registrations and Mr Pant was plainly the person responsible for making those registrations.
Mr Hynes rightly submits, with reference to Accolade Wines, that the relevant prejudice for the purpose of PPSA s 293(3)(b) is the prejudice that arises from making an order extending the relevant registration period. He submits that reliance for the purpose of PPSA s 293(3)(c) is not limited to the notion of “but for” causation. Assuming, without deciding, that proposition is correct, it does not assist the Receivers here, because there is no evidence that GLAS, Vitol, any third party paid any attention to the existence or non-existence or character of the First Registrations or would otherwise be adversely affected by now extending the time for the making of the First Registrations, and reliance is not established in any relevant sense.
In a further submission made between the first and second day of the hearing, Mr Hynes submits that:
“There was no relevant accident or inadvertence which concerned the time in which the 30 July 2025 registrations were made. The evidence before the Court and the submissions made concerning the prior registrations would now appear largely irrelevant to the assessment of whether relief under s 293 of the PPSA and/or s 588FM of the Corporations Act should be granted in respect of these later registrations.”
I do not accept that submission. As the case law which I address in this judgment makes clear, inadvertence in respect of the form in which a first registration is made is relevant to whether the Court should extend time under PPSAs 293 or CA s 588FM to permit a later registration to be made in terms that corrects the earlier registration.
I will address a further submission made by Mr Hynes between the first and second day of the hearing, dealing with the fact that the MOB065 30 July Registration included inventory, below. Mr Hynes also submitted that:
“Section 293 of the PPSA is also limited to extending the time period in section 62(3)(b) of the PPSA. In its terms, it has no operation if, contrary to the requirements of section 62(3)(c) of the PPSA the secured party fails to include on “the registration that perfects the purchase money security interest [a statement that], in accordance with item 7 of the table in section 153, that the interest is a purchase money security interest”.
While I accept that submission as to the scope of PPSA s 293, in terms, an extension of time may indirectly address that issue, where the registration made within the extended time complies with that requirement.
“While the entry of a grantor into external administration does not appear to preclude relief being granted under s 293 (see Re Appleyard at [30]), there again appears to be no authority where s 293 relief has been granted in respect of PMSIs perfected by registrations made after the ‘critical time’ (as opposed to ones in place at the ‘critical time’).
Consistent with the approach to be taken under [CA] ss 588FL and 588FM …, s 293 of the PPSA may be taken to only be concerned with granting relief in respect of a PMSI perfected by registration at the ‘critical time’, and not some later registration sought to be made to elevate the priority of an earlier one”.
I return to that matter below and, in short, I do not accept that a sensible distinction can be drawn, where PPSA s 293 does not require it in terms, between an extension of time to allow a registration just before the critical time, which the case law has permitted, and an extension of time to permit a registration shortly after the critical time, which Mr Hynes submits is not available.
“Moreover and separately, the delay in the registration of a further PMSI in respect of MOB065 is significant and may have a wider creditor impact. As at 15 September 2025, there would have been a lapse of 272 business days since the date on which the registration was required to be effected under s 62(3)(b) of the PPSA.”
I do not accept that submission, and it is therefore not necessary to address Mr Castle’s criticisms of the decision in Dairy Soils. This application was brought promptly after the issues as to the First Registrations were identified, and the delay is not different in kind from that which has been accepted in other cases in which relief has been permitted.
Here, MTC has an existing and valid security registration on the PPSR in respect of MOB065 although, by its failure to record that security as a PMSI, that registration does not provide the priority that would be provided by registration of a PMSI. I accept that the making of that registration in that form was inadvertent, and that the Receivers have not established that any third party including Vitol suffered prejudice by reason of the error in that registration.
I was troubled, in the course of submissions, that the relief sought by MTC would potentially undermine the integrity of the PPSR, where the MOB065 First Registration would continue to exist on the PPSR with the relevant financing statement indicating to users of the register that the security was not a PMSI and the MOB065 30 July Registration would then be added to the PPSR with a contrary financing statement indicating that the same security over the same collateral for the same arrangement was a PMSI. The two financing statements and associated registrations would be inconsistent and it is not apparent how a user of the PPSR could determine, from the face of the PPSR, which financing statement or registration was correct.
However, I recognise that relief of the kind sought here was granted in 4 in 1 Wyoming, although in circumstances that the financing statements were registered before the critical time. Gleeson JA noted (at [4], [8(2)]] that the security interests in that case were granted between March 2015 and September 2016; a review of the registrations in October and November 2016 revealed deficiencies in a large number of those registrations, including that some of the financing statements lodged on the PPSR did not note the plaintiff’s security interest was a PMSI when it might be characterised as such; and (at [18]) that, on 1 and 2 November 2016, the plaintiff there filed new financing statements on the PPSR in respect of existing security interests taken against numerous grantors, which registered financing statements in relation to the relevant collateral as both a PMSI and a non-PMSI, apparently in the alternative. The critical time was there 7 and 14 November 2016 ([15], [17] and [52]) so those registrations were made just before the critical time. Importantly, Gleeson JA also there expressed no disapproval of the fact that the plaintiff had registered financing statements in relation to the relevant collateral as both a PMSI and a non-PMSI, although that would also have given rise to inconsistent financing statements and registrations on the PPSR.
His Honour there noted (at [11]) that the effect of indicating that a security interest was not a PMSI, when in fact it was and could result in an alteration of the priority position that might otherwise be enjoyed by the holder of a PMSI under PPSA s 62, by reason of PPSA ss 55(4) and 62. His Honour there made orders (at [1]), inter alia, extending the date for the Plaintiff to register specified PPSR registration numbers for the purposes of CA s 588FL(2)(b)(iv) and, under PPSA s 293, extending the number of days set out in PPSA s 62, to allow the Plaintiff the benefit of PMSI priority set out in PPSA s 62. Importantly, those orders extended to securities granted by two companies which had already entered into external administration, as to one of which the administrators had continued to pay ongoing rental payments and the relevant goods remained in the company’s possession (at [52]–[53], Schedule 1, items 21, 139, schedule 2, items 22, 160). His Honour also noted at [55], in dealing with the power under PPSA s 293 and presumably by analogy, that:
“It is well established that the power to make an order under s 588FM is available where a company is in liquidation or administration: International Network Consultants Pty Ltd v Tschannen (in his capacity as controller of Quality Blended Liquor Pty Ltd) [2015] 2 Qd R 381; (2014) 102 ACSR 451; [2014] QSC 234 at [83]; Re Donnelly (in their capacities as joint and several administrators of Carpenter International Pty Ltd (admins apptd)) (2016) 111 ACSR 477; [2016] VSC 118 at [127].”
I recognise that the relevant insolvency administrators there did not, by contrast with the position here, indicate any objection to the relief sought. Mr Castle points out that that case has subsequently been cited on many occasions, although it is not apparent that later citations have considered the matters that are in dispute here.
Relief of the kind sought by MTC was also granted in 100% Plumbing at [28]–[29] where I addressed a similar application, but also in respect of a registration made before the critical time, as follows:
“Turning now to the factual background to the “PMSI Issue”, between 17 August 2020 and 20 August 2020 and in the course of addressing the ABN Issue, the Plaintiffs identified a second issue, that the PMSI field of the PPSR registration was incorrectly set to “No” instead of to “Yes” for all security interests granted under security agreements entered in TFAL’s systems since 9 May 2020. The cause of this error was an inadvertent modification to the computer code responsible for lodging financing statements on the PPSR made in the course of addressing the ABN Issue. Since 3 September 2020, the Plaintiffs have reinstated the appropriate computer code to ensure that all registrations made on the PPSR from that date forward would correctly identify the underlying security interest as a “purchase money security interest”. Remedial Registrations in respect of this issue were made from 3 September 2020 and, involving a large number of registrations, were not completed until 23 November 2020.
The Plaintiffs note that an extension of time has also been sought under s 588M of the Corporations Act (to which I referred above) in respect of the PMSI Issue. Mr Izzo and Mr Mirzai submit, and I accept, that the PMSI Issue is in the nature of an accident or arises from inadvertence. They submit, and I also accept, that the error giving rise to this issue occurred because of the inadvertent modification to a computer code. An order under this section should be made in respect of the PMSI Issue on the same basis as it was granted in respect of the ABN Issue. The Plaintiffs also seek an extension of time under s 293(1)(a) of the PPSA in respect of the PMSI Issue since, in most cases, the new or amended registrations effected to address the PMSI Issue fall outside the 15-business day period prescribed by s 62(3)(b) of the PPSA. I am satisfied that order should be made on the same basis as the order sought by the Plaintiffs under that section in respect of the ABN Issue.”
There is a real importance in consistency and predictability of decision-making in cases of this kind, with wide implications for the commercial community, and I am not satisfied that the approach taken in these cases was plainly wrong so as to warrant departing from it now. I am also not satisfied that the fact that the MOB065 30 July Registration was made shortly after the critical time, although promptly after the issues as to the effectiveness of the First Registrations came to MTC’s attention, provides a sufficient basis on which to distinguish the approach taken in those cases. Subject to addressing a further matter raised by Mr Hynes, I would make the order sought by MTC in respect of MOB065 on that basis.
As to that further matter, Mr Hynes submits, correctly, that PPSA s 293(1)(a) does not permit the order sought in respect of a registration in respect of inventory, as distinct from a PMSI, and that the MOB065 30 July Registration included inventory. He points out that:
“Section 62 of the PPSA deals with the priority of PMSIs over other security interests. Section 62(2) deals with PMSIs where the security interest is in inventory and s 62(3) deals with PMSIs where the security interest is in personal property other than inventory. Different rules apply to the registration of PMSIs under s 62(2) and s 62(3) of the PPSA. Where s 62(2) applies (where the security interest is in inventory comprising goods) the PMSI must be perfected by registration at the time of delivery. Where s 62(3) applies, the PMSI must be perfected by registration before the end of a 15-business day period.
Section 293 of the PPSA contains provisions to extend the number of business days in a period specified in certain PPSA provisions. In relation to PMSIs to which s 62 applies, the power to extend under s 293(1) is only available in respect of PMSIs where the security interest is in property other than inventory: see [Accolade Wines] at [24].”
I do not consider that the Court could make an order under PPSA s 293(1) to extend to a registration that included inventory, where that is beyond its power, or make an order that extended time for only one element of the one registration. It is not to the point that, as Mr Castle submits, the registration might not be invalid in whole, once made, where the Court does not have the power to make then order sought.
I have noted above that I did not hear Mr Castle as to a fourth reformulation of the order sought by MTC to seek to address this difficulty in further submissions on the second day of the hearing, in the interests of achieving at least a short period in closing submissions in which there was clarity as to the relief sought by MTC and the Receivers would know the case they had to meet and the Court would know the case that it had to decide. Having said that, it does not seem to me that it would be consistent with the interests of justice to decline the relief sought by MTC in respect of MOB065 by reason of this difficulty alone. I will allow MTC two business days after the delivery of this judgment to reformulate the orders sought, again, to provide for an extension of time for registration of its security in respect of MOB065 excluding inventory. It is not, of course, bound to take up that opportunity and if it does not wish to do so its application in respect of MOB065 of will be dismissed. I will address a similar issue and an additional issue in respect of MOB017 below.
MTC also seeks orders under CA s 588FM in order to avoid the operation of CA s 588FL by, relevantly, extending the time to permit the MOB065 30 July Registration. Section 588FL provides that:
“Vesting of PPSA security interests if collateral not registered within time
(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.
Note 1: For the meaning of critical time, see subsection (7).
Note 2: For when a security interest is enforceable against third parties under the law of Australia, see section 20 of the Personal Property Securities Act 2009.
Note 3: A security interest may become perfected at a particular time by a registration that is made earlier than that time, if the security interest attaches to the collateral at the later time (after registration). See section 21 of the Personal Property Securities Act 2009.
Note 4: The Personal Property Securities Act 2009 provides for perfection by registration, possession or control, or by force of that Act (see section 21 of that Act). …
Vesting of security interest in company
(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). …
(7) In this section:
“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) in any other case--when, on a day, the event occurs by virtue of which the day is the section 513C day for the company.”
“The effect of s 588FL(2) is that when a company is being wound up, an administrator is appointed, or a deed of company arrangement executed, any PPSA security interest which was perfected, registered, or enforceable against a third party after the latest of six months before the “critical time” or 20 days after the security agreement came into force or such later time as the Court may fix under s 588FM, vests in the company, for the benefit of creditors generally, and the secured creditor loses the benefit of the security: Cardinia Nominees at [11]; Re Black Opal IP Pty Ltd (subject to deed of company arrangement) [2013] NSWSC 1225 at [6]; Appleyard Capital at [8].”
“Extension of time for registration
(1) A company, or any person interested, may apply to the Court (within the meaning of section 58AA) for an order fixing a later time for the purposes of subparagraph 588FL(2)(b)(iv).
Note: If an insolvency-related event occurs in relation to a company, paragraph 588FL(2)(b) fixes a time by which a PPSA security interest granted by the company must be registered under the Personal Property Securities Act 2009, failing which the security interest may vest in the company.
(2) On an application under this section, the Court may make the order sought if it is satisfied that:
(a) the failure to register the collateral earlier:
(i) was accidental or due to inadvertence or some other sufficient cause; or
(ii) is not of such a nature as to prejudice the position of creditors or shareholders; or
(b) on other grounds, it is just and equitable to grant relief.
(3) The Court may make the order sought on any terms and conditions that seem just and expedient to the Court.”
“The effect of s 588FM is to confer on the Court a discretion to fix a later time for the purposes of s 588FL(2)(b)(iv) if satisfied of any one of three grounds — that the failure to register the collateral earlier was accidental, or was not of such a nature to prejudice the position of creditors or shareholders, or that on other grounds it is just and equitable to do so. In addition, the Court may make the order on terms and conditions: Appleyard at [9]. Such conditions may address the risk that an order under s 588FM can operate to the detriment of unsecured creditors, if the company is placed in liquidation or administration within six months of the security interest being perfected and, but for the extension of time, the security interest would have vested in the grantor under s 588FL.”
“… although I accept, as the authorities make clear, that the presence or absence of prejudice to unsecured creditors is a relevant discretionary consideration, relevant prejudice is not necessarily established merely by showing that the dividend to unsecured creditors will be less if the security interest does not vest in the company; the unsecured creditors may well have been in no different a position had the security interest been timely registered. The type of prejudice that is of particular relevance is prejudice attributable to the delay in registration, rather than prejudice from making the order (which is inevitable). This is the type of prejudice contemplated the legislation (see s 588FM(2)(a)(ii), which refers to prejudice from the failure to register earlier, not from making the order) ….”
No question of vesting of MOB065 in Dartbrook under CA s 588FL here arises, by contrast with the position in respect of MOB017 which I address below. MTC nonetheless seeks an order under CA s 588FM, for the purposes of CA s 588FL(2)(b)(iv) in respect of MOB065, so that registration time for the MOB065 30 July Registration will not be after the later time ordered by the Court under s 588FM. I have largely addressed Mr Castle’s submissions above. Mr Hynes rightly accepts, with reference to Appleyard Capital at [30], that the prejudice that is relevant for the purposes of CA s 588FM is prejudice attributable to delay in registration, rather than prejudice from making the proposed extension order. Mr Hynes also submits that an order under s 588FM is only available within the scope of s 588FL(2)(b)(iv) and is not a wholly separate jurisdiction to extend time for any purpose. I accept that submission but it does not assist the Receivers here. As Mr Castle points out, the security interest in respect of MOB065 here arose under the HSA, before the critical time, and Mr Hynes rightly accepts that it was enforceable against Dartbrook and perfected by registration prior to the critical time. The use of s 588FM to permit an amended security interest, where there was an error in the initial registration of a PMSI, has been accepted in at least 4 in 1 Wyoming and 100% Plumbing, and I am not satisfied that the approach taken in these cases was plainly wrong so as to warrant departing from it now. I am also not satisfied that the fact that the MOB065 30 July Registration was made shortly after the critical time, although promptly after the issues as to the effectiveness of the First Registrations came to MTC’s attention, provides a sufficient basis on which to distinguish the approach taken in those cases
It may be open to question whether there was here a failure by MTC to make the MOB065 First Registration earlier, for the purposes of s 588FM(2), where the relevant financing statement was registered (although not as a PMSI) within time. However, little turns on that question where s 588FM(2) allows the Court to make the orders sought if it is satisfied, on other grounds, that it is just and equitable to grant relief, and that does not depend on a failure to register the collateral at some earlier point. If MTC elects to narrow the scope of a new registration in respect of MOB065 to excluded inventory. I will make the order sought by MTC under CA s 588M, if MTC addresses the issue noted in paragraph 70 above so as to obtain relief under PPSA s 293 in respect of MPOB065.
The second claim brought by MTC relates to MOB017, which, as I noted above, was delivered by MTC to Dartbrook on 18 December 2024 and where the MOB017 First Registration was not made until 17 April 2025; a further registration was made in respect of spare parts on 7 July 2025; and the 30 July Registration in respect of MOB017 (“MOB017 30 July Registration”) was made after the critical time. It is common ground that, subject to any order now made by the Court under CA s 588FM, MOB017 has vested in Dartbrook. MTC here seeks an order under PPSA s 293(1) extending the time for registration of a security interest in respect of MOB017 to permit the MOB017 30 July Registration. MTC again contends that it is just and equitable to extend time, because, by inadvertence, it did not make the MOB017 First Registration within time or as a PMSI. MTC also seeks an order under CA s 588FM, for the purposes of CA s 588FL(2)(b)(iv), in respect of MOB017.
Mr Castle rightly recognises that the MOB017 First Registration was made outside the 15 business day period for a PMSI and also outside the 20 business day period specified in s 588FL(2)(b)(ii) of the CA and within six months of critical time under s 588FL(2)(b)(ii), when voluntary administrators were appointed to Dartbrook. He also recognises that (as I noted above) unless the Court extends the time for that First Registration (or, as MTC alternatively seeks, for the MOB017 30 July Registration in different terms) that security interest has vested in Dartbrook under CA s 588FL(4). Mr Castle acknowledges that the further financing statement lodged by MTC on 30 July 2025 in respect of MOB017, which recorded MTC’s interest in MOB017 and associated inventory as a PMSI would also not be effective without an extension of time ordered by the Court. I have referred to other aspects of Mr Castle’s submissions and Mr Hynes’ submissions as to the applicable statutory provisions in dealing with the claim as to MOB065 above.
As its primary position, MTC seeks relief under PPSA s 293 and CA s 588FM so as to validate the MOB017 30 July Registration, which I recognise will provide inconsistent information to that included in the MOB017 First Registration. I accept that, for the purposes of PPSA s 293(3), the need to extend the period arises as a result of inadvertence, for the same reasons that I reached then conclusion in respect of MOB065. I would make the orders sought by MTC under PPSA s 293 in respect of MOB017, for the same reasons that I would make them above in respect of MOB065, subject to two matters.
The first of those matters is that the extension of time sought in respect of the MPOB017 30 July Registration or any further registration (to address the issue as to inventory noted below) would cause actual and material prejudice to at least Vitol, where the order sought would expose Dartbrook or the Receivers (under CA s 419, which I address below) to a retrospective obligation to pay rent to MOB017; the payment of that rent by Dartbrook would reduce the amount of Dartbrook’s assets available to Vitol under its security; and the payment of that rent by the Receivers would prejudice Vitol where the Receivers would likely be indemnified by Vitol, as their appointor, for the amount paid by them. It is also plain that the Receivers have here acted in reliance on the vesting of MOB017 in Dartbrook in not paying rent on MOB017 to MTC after that vesting. It seems to me that, after taking in to account that prejudice and that reliance as PPSA s 293(3) requires, the Court would not grant the relief sought by MTC unless that prejudice is removed.
MTC recognises this issue and seeks to address it in a somewhat incomplete way. Initially, Mr Castle raised the possibility the Court could impose a term requiring MTC not to contest the relief sought in the Receivers Interlocutory Process from the period from 10 July 2025 (the date of an email sent by the Receivers seeking information as to security interests) to 8 August 2025 (when the Originating Process was filed) and MTC subsequently offered an undertaking broadly to that effect. It does not seem to me that undertaking adequately addresses the prejudice in respect of MOB017, where it leaves the Receivers to pursue a disputed Interlocutory Process in respect of the period after 8 August 2025. Here, Dartbrook and the Receivers are not, as matters stand, liable to pay rent on MOB017 to MTC from the date that MOB017 vested in Dartbrook to the date that vesting is reversed by an order of the Court with retrospective effect under PPSA s 293. Mr Castle submits that would expose MTC to loss of rental during the period that it took to determine the proceedings, but it seems to me that there is no reason that the Receivers or Vitol should bear that loss where the proceedings were necessary as a result of MTC’s rather than their conduct. However, I will allow MTC two business days after the delivery of this judgment to reformulate its undertaking to extend to rental that would otherwise have accrued from the date of vesting to the date of entry of orders made by the Court. MTC is not, of course, bound to take up that opportunity or offer such a reformulated undertaking and, if it does not wish to do so its application, in respect of MOB017 will be dismissed on this basis.
The second issue is that the MPB017 30 July Registration, like the MOB065 30 July registration, included inventory and an order can only be made under PPSA s 293 if a new registration is made that excluded inventory. Consistent with the position in respect of MOB065, I will allow MTC two business days after the delivery of judgment to reformulate the orders sought to allow an extension of time for registration of an amended security in respect of MOB017 excluding inventory. MTC is also not bound to take up that opportunity and, if it does not wish to do so, its application in respect of MOB017 will also be dismissed on that second basis, consistent with the position as to MOB065.
Turning now to CA s 588FM, I accept that there was a failure to make the MOB017 First Registration earlier, for the purposes of s 588FM(2), at least on the basis that there was a delay in registration of that collateral to 13 April 2025. In any event, as I noted above, s 588FM(2) allows the Court to make the orders sought if it is satisfied, on other grounds, that it is just and equitable to grant relief and that does not depend on a failure to register the collateral at some earlier point. I will grant that relief for the reasons noted above in respect of MOB065. Those reasons are no less applicable where, by contrast with the position in respect MOB065, the MOB017 First Registration has vested under CA s 588FL.
Between the first and second hearing dates, MTC amended the orders that it sought to include alternative relief under PPSA s 293 and CA s 588FM to extend the time for the MOB017 First Registration in its original form, and the Receivers indicated that they did not oppose relief in that form. That relief would be consistent with the relief given under PPSA s 293 and CA s 588FM in many cases including those to which have referred above, where the delay in that registration was apparently inadvertent, and that relief would (retrospectively) avoid vesting of that security under CA s 588FL. I would readily grant that relief by consent, although it appears it will not be necessary to do so where it is sought in the alternative, unless MTC chooses not to address the matters noted above so as to obtain the primary relief that it seeks in respect of MOB017.
By Interlocutory Process filed on 3 September 2025, the Receivers applied for further relief, by way of a direction under CA s 424, consequential upon any position that MTC did not have a perfected security interest in MOB065 or MOB017 or that such a security interest was not registered in the time required by s 62(3)(b) of the PPSA, as extended under s 293(1)(a) of the PPSA.
The first basis of that relief does not now arise, where the Receivers now accept that MTC had a perfected security interest in MOB065 or MOB017 at relevant times. The second issue also will not arise, if MTC chooses to address the one matter noted above in respect of MOB065 and the two matters noted above in respect of MOB017 so as to obtain the primary relief that it seeks. I will nonetheless briefly address the relief sought, to the extent that it still pressed.
The Receivers initially sought, but now do not press, a declaration that they would be justified in proceeding on the basis that the security interest by GLAS has priority over MTC’s security interest in the Machines or alternatively that Dartbrook and the Receivers must attorn to GLAS in respect of rent in amounts payable by Dartbrook pursuant to the HSA and not pay rent to MTC, unless and until GLAS’s security interest is redeemed or discharged. They rightly did not press that direction, where it is not apparent that they have any present need to determine those questions and, if they are to be determined, they should not be determined in proceedings in which GLAS is not joined and not bound by the outcome. The Receivers pressed an application for an order under CA s 419A(7) that, if MTC obtained the relief sought, the Receivers should be excused from liability for rent payable on the Machines until one business day after the Court’s determination of the relief sought by MTC in the Originating Process.
Mr Hynes initially submitted that:
“In taking control of MOB 065 and MOB 017 upon their appointment, the Receivers have properly relied upon the state of the register and proceeded on the basis that any amounts payable under the HSA are not payable to NTC given the existence of GLAS’s undischarged security.”
I do not accept that submission in respect of MOB065. It is not apparent that any unresolved question as to the registration of MOB065, including whether it was a PMSI, had any impact upon the Receivers’ obligations under CA s 419A, where they continued to use that Machine for the benefit of Dartbrook and their appointor, GLAS and ultimately Vitol. It does not seem to me that any question of priority, as between GLAS and MTC, had any impact on the liability of the Receivers to MTC arising under s 419A in respect of MOB065. I am not persuaded that there is any basis to relieve the Receivers from liability to pay rent under MOB065, where Dartbrook and the Receivers have had the use of that Machine in generating ongoing revenue for the mine.
In further submissions made between the first and second days of the hearing, Mr Hynes submitted that:
“The liability of a receiver for rent arises from the operation of s 419A(1) and (2). Section 419A(1) provides:
(1) This section applies if:
(a) under an agreement made before the control day in relation to a controller of property of a corporation, the corporation continues after that day to use or occupy, or to be in possession of, property (the third party property) of which someone else is the owner or lessor; and
(b) the controller is controller of the third party property.”
Subsection (2) provides for the period of time within which the controller may be liable for such rental. Subsection (3) allows a controller to give notice within 7 days of their appointment specifying that they do not propose to exercise rights in respect of the property. Subsection (7) provides: “subsection (2) does not apply in so far as a court, by order, excuses the controller from liability, but an order does not affect a liability of the corporation”.
The consideration of the Receivers’ application for s 419A(7) relief arises having regard to the rental position in respect of each machine.”
“Section 419A of the Corporations Act cannot apply to leased property under a PPS lease which has vested because the threshold condition in s 419A(1)(a) (that “the corporation continues […] to use or occupy, or to be in possession of, property […] of which someone else is the owner or lessor”) is not satisfied. Post-vesting, the lessor no longer owns the leased property, nor is it the lessor of the property.
For these reasons, the Receivers are not liable for rental in respect of MOB017 for the purpose of s 419A(2) of the Corporations Act.”
“The Receivers accept that Dartbrook continues to possess and use both MOB017 and MOB065 in its business, however it is not clear that there is any step that the Receivers can currently take to defray their exposure for rent against the future contingency of orders being made pursuant to s 293(1) of the PPSA and s 588FM of the Corporations Act which have the effect of the plaintiff recovering title to MOB017 and obtaining PMSI priority with respect to both machines.
Noting the plaintiff’s undertaking not to seek any payment of rental in respect of MOB017 until 11 August 2025, the Receivers seek relief from rent in respect of both machines until the day after any substantive orders are made, being the date upon which the legal entitlements of the parties will have crystalised.”
Importantly, the Receivers also confirmed the Receivers’ intention to promptly pay any rental that they may be liable for under CA s 419A following the determination of the applications in this proceeding.
In response, Mr Castle rightly pointed out that CA s 419A was engaged where the Machines are the subject of leases from MTC to Dartbrook with reservation of title clauses in favour of MTC, and rightly points out that MTC’s rights in respect of MOB065 were not qualified by any issue as to its registered security interest, which did not vest in Dartbrook, although a question might arise as to the vesting of the security interest in MOB017 in Dartbrook. Mr Castle also rightly drew attention to the Receivers’ liability under CA s 419A(2) for rent payable by Dartbrook under the HSA for the period that began seven days after the control day (as defined), where Dartbrook continued to use the Machines. Mr Castle also rightly pointed out that the Receivers had not given notice they did not propose to exercise rights in relation to the Machines under CA s 419A(3) and the Machines were in fact being used for continued operation of the mine operated by Dartbrook although neither Dartbrook nor the Receivers had not paid rent for the use of the Machines. Mr Castle submitted that the Receivers should not be excused from liability under CA s 419A(7).
On the view that I have taken above, no issue arises in respect of MOB017 and the Receivers have no need for relief under CA s 419A(7) in that regard. If MTC offers the undertaking noted in paragraph 82 above extending to the date of judgment, the Receivers will not be exposed for liability for the period in which MOB017 was vested in Dartbrook, until orders made under PPSA s 293 and CA s 588FM retrospectively reversed that position; and, if MTC does not offer that undertaking, it will not obtain relief in respect of MOB017 which will remain vested in Dartbrook, and no liability of the Receivers for rental will arise and no relief under s 419A(7) is required.
A party which seeks a dispensation from the Court will generally be required to pay the costs of other parties which need to be notified of the claim, and an insolvency practitioner which appears in such an application and acts reasonably would ordinarily be entitled to the costs of that application: Chand v Azurra Pty Ltd (in liq) (2011) 82 ACSR 383; [2011] NSWCA 58. I am inclined to think that, where MTC required the Court’s intervention in order to extend the time for the registrations it has made, it should pay the costs of the Receivers’ involvement in what became a complex and relatively lengthy application, where the Receivers’ involvement was plainly necessary to expose the complexities of the application. However, I indicated that I would allow the parties an opportunity to be heard as to costs and I will do so.
I make the following orders:
Direct the Plaintiff to advise the Defendants, with a copy to the Asssociate to Black J, by 4:00pm on 23 September 2025 of the revised orders that it seeks and any undertaking that it offers to address the matters noted in paragraphs 70 and 82-83 of this judgment.
Direct the parties to submit agreed consent orders to give effect to this judgment to the Associate to Black J by 4:00pm on 25 September 2025 or, if there is no agreement, their respective draft orders and submissions not exceeding five pages in Arial font 12, one and a half spacing, as to the differences between them, indicating whether an oral hearing as to orders is requested.
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(2003) 135 FCR 206
(2013) 277 FLR 337