Plaintiff v Defendant

1. Section 17 of Personal Property Securities Act 2009 (Cth) ('PPSA'), which is the guide to Pt 2.2 of the legislation, relevantly provides:

...

A security interest is only enforceable against a third party if it has attached to collateral and the secured party possesses the collateral, has perfected the security interest by controlling the collateral or has entered into a written security agreement that describes the collateral.

...

A perfected security interest has priority over an unperfected security interest, and the security interest that has been continuously perfected for the longest time generally has the highest priority (see Part 2.6 for priority rules).

Perfection occurs when a security interest has attached to collateral and any further steps needed to make the security interest effective against third parties have been taken.

These steps involve registration on the Personal Property Securities Register or possession or control of the collateral...

Perfection of security interest by registration

1. When a security interest is 'perfected' in the context of the PPSA, the secured party has achieved the best possible position under the legislation to protect its interest.[6] Perfection of a security interest over collateral[7] may occur under s 21(1) of the PPSA upon its registration on the PPSR in accordance with s 21(2)(a), which relevantly provides that 'for any collateral, a registration is effective with respect to the collateral.' According to s 10 of the PPSA, a registration is 'effective' with respect to particular collateral if it is effective with respect to that collateral in accordance with Pt 5.4 of the PPSA.[8] Accordingly, to perfect a security interest by registration, it is necessary to register a financing statement that describes the collateral. A financing statement is distinct from the security agreement itself, which provides written evidence of the underlying security held by the creditor in the collateral. By contrast, the financing statement is the document used to describe and register the creditor's interest. As a rule, the security agreement covering the underlying collateral and the financing statement used to obtain registration should be consistent.[9]
2. Section 153 of the PPSA specifies the data that must be included within a financing statement, including secured party and grantor identifiers (items 1 and 2) and the collateral (item 4). Schedule 1 to the Personal Property Securities Regulations 2010 (Cth) ('PPS Regulations'), in turn, prescribes details that must be included in a registration for the purpose of s 153, including specification of a collateral class (item 2.3(1)).
3. Section 160, which is found within Pt 5.4 of the PPSA, essentially provides that a registration of a security interest of a secured party will commence at the 'registration time', which is 'when the description [of the collateral] becomes available for search in the register in relation to that secured party'.
4. Section 163 contemplates that a registration of a security interest that describes particular collateral will be effective with respect to that collateral from the registration time until the happening of certain events. However, according to s 164, a registration may be ineffective because of a defect in the register, which includes a 'seriously misleading' defect or certain defects in registration identified in s 165, including where the collateral is required by the PPS Regulations to be described by serial number, but this has not occurred. Specification of an incorrect collateral class is not a prescribed defect for the purpose of s 165.
5. Whether a defect is 'seriously misleading' for the purpose of s 164 of the PPSA depends on whether the defect results in the registration not being discoverable on a search of the PPSR.[10] A person undertaking a search of the PPSR is likely to be concerned with the identity of the grantor and/or the collateral.[11] In the New Zealand case of Simpson v New Zealand Associated Refrigerated Food Distributors Ltd,[12] the New Zealand Court of Appeal held a registration was not 'seriously misleading' where it contained an overly broad description of collateral, being an AllPAAP, even though the security agreement only granted a security interest in narrower and more specific collateral.[13]

Circumstances of vesting of security interest

1. The status of a security interest may be affected where the grantor company later goes into external administration. Section 588FL of the Corporations Act relevantly provides:

(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;

(iv) a restructuring practitioner for the company is appointed under section 453B;

(v) a company makes a restructuring plan under Division 3 of Part 5.3B;

(vi) section 842A, or Subdivision C of Division 9 of Part 7.3B, begins to apply to a body corporate; 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;[14]

...

(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.

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; or

(c) if the company is under restructuring or is subject to a restructuring plan - when, on a day, the event occurs by virtue of which the day is the section 513CA day for the company.

1. In broad terms, s 588FL of the Corporations Act operates so that where the security interest is registered within 20 business days after the relevant security agreement comes into force, the security interest will prevail over the interests of unsecured creditors, even where a relevant insolvency event occurs within six months after the registration.[15] However, where the security interest is registered outside the 20 business day period and the company goes into external administration within six months after registration, the security interest will vest in the grantor company for the benefit of creditors generally and the secured creditor will lose the benefit of the security.[16]

Extension of time for registration of security interest

1. Section 588FM of the Corporations Act provides a secured creditor with a means of obtaining relief from the serious consequences of failing to comply with the strict requirements for registration of a security interest on the PPSR. The provision confers upon the Court a discretion to fix a later date for the registration of collateral in certain circumstances. Section 588FM relevantly provides:

(1) A company, or any person interested, may apply to the Court (within the meaning of section 58AA)[17] for an order fixing a later time for the purposes of subparagraph 588FL(2)(b)(iv).

(2) On an application under this section, the Court may make the order sought if it is satisfied that:

(a) the failure to register the collateral earlier:

(i) was accidental or due to inadvertence or some other sufficient cause; or

(ii) 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.

1. Section 588FM operates as a remedial provision. The purpose and effect of an order under s 588FM is to avoid the vesting of the security interest in the company if it goes into liquidation or administration within six months after the date of registration of the security interest, thereby preserving the secured creditor's security 'to the necessary detriment of the unsecured creditors for whose benefit the security interest would otherwise vest in the company.'[18] In Re Antqip Hire Pty Ltd (in liq),[19] Brereton JA articulated the purpose of s 588FM as being 'to avoid injustice to secured parties where their failure strictly to comply with the registration requirements is attributable to inadvertence or has not occasioned prejudice - not to protect windfalls for unsecured creditors.'[20] Importantly, the making of an order under s 588FM fixing a later time for registration will not disturb the priority of security interests already registered.[21] That is because the priority of a security interest the subject of an order under s 588FM has effect only from the date of its actual registration.[22] Further, the section only provides relief from the consequences of the belated registration of perfected interests as opposed to unperfected interests.[23]
2. In Re Cardinia Nominees Pty Ltd,[24] Black J observed that the terms of s 588FM 'are broadly similar to the circumstances in which the Court could previously extend the time for lodgement of a notice of a charge under [the now repealed] s 266(4) of the Corporations Act.'[25]
3. Only one of the three grounds in s 588FM(2) need be established to enliven the Court's jurisdiction to make an order under the provision.[26] At the hearing of the proceeding, counsel confirmed that Mr Savage primarily relies on the ground of accident or inadvertence under s 588FM(2)(a)(i) and, in the alternative, the just and equitable ground under s 588FM(2)(b). I will address the grounds relied on by the plaintiff, including the authorities that have considered those grounds, and then consider the discretionary factors that arise in this case. However, before doing so, it is appropriate to say something more about the status of the earlier registration.

1. The application to extend time for the later registration assumes a shortcoming in relation to the earlier registration. It is necessary to explain the status and effect of the earlier registration.
2. First, as earlier explained, the GSA executed by the parties provided for a security interest 'in all of [Ionic's] present and after-acquired property, including ... [a]ll personal property (tangible and intangible).' Mr Savage's security interest created by the GSA therefore extended to all property of Ionic, including currency and any other personal property. Mr Savage was entitled to select the AllPAAP collateral class at the time of the earlier registration but instead selected a narrower class, being 'Financial property - Currency'.[27]
3. Second, for the purpose of s 21(2)(a) of the PPSA, the earlier registration is 'effective', and a security interest perfected, with respect to currency because it 'describes' the collateral as currency in accordance with ss 160 and 163 of the PPSA. When lodging his financing statement, Mr Savage picked an available description, albeit narrower than the collateral contemplated by the GSA.
4. Third, for the purpose of s 164 of the PPSA, the earlier registration is unlikely to be rendered ineffective because of any defect in the register, including a 'seriously misleading' defect or any of the defects identified in s 165. In particular, it does not appear to be 'seriously misleading' for the purposes of s 164 because the GSA provided for a security interest in all of Ionic's property, which included any currency that it had. Importantly, the earlier registration has remained discoverable on a search of the register and does not seem to be defective for the purposes of s 165 because it was collateral that was not required to be described by serial number (in accordance with s 153 of the PPSA and item 2.2 of Sch 1 of the PPS Regulations). It was otherwise capable of being disclosed by a search of the company's ACN (being the relevant grantor identifier required by s 153 of the PPSA and item 1.3(4)(3) of Sch 1 of the PPS Regulations) and included the collateral class of 'financial property' (pursuant to s 153 of the PPSA and item 2.3(1)(e) of Sch 1 of the PPS Regulations).
5. Fourth, where collateral described in a security agreement is broader than the collateral described in the financing statement, the registration will only be effective in relation to the narrower collateral specified in the financing statement.[28] The registration cannot perfect a security interest in collateral wider than the collateral it specifies. Here, collateral other than currency was not described in the financing statement accompanying the earlier registration (pursuant to ss 160 and 163 of the PPSA) and, accordingly, the earlier registration is not 'effective' with respect to any collateral falling within the scope of the ALLPAAP security interest that is not currency.
6. Last, it follows that the earlier registration did not perfect a security interest in respect of any collateral except for currency. It did not perfect a security interest over all present and after-acquired property of Ionic. This leaves the earlier registration vulnerable to later events. Pursuant to s 267 of the PPSA, a security interest that is unperfected at the time of a relevant insolvency event vests in the grantor. While the later registration perfected Mr Savage's ALLPAAP security interest, it was registered late and, by operation s 588FL of the Corporations Act, it remains liable to vesting in Ionic in the event that the company goes into external administration. Hence, the necessity of this application.

Consideration of application for extension of time

1. In Re Accolade Wines Australia Ltd,[29] Brereton J considered the concept of 'inadvertence' and its meaning in the context of s 588FM, stating:[30]

For the purpose of s 588FM(2)(a)(i), "inadvertence" includes failure to advert to or understand the requirement for registration within the specified period, and innocent error in the sense of failure to register through ignorance of the legal requirement to do so, or of the consequences of not doing so. Inadvertence will readily be found where an error of a secured creditor in not attending to registration of its security within time is innocent and does not result from any disregard of its statutory obligations.

1. In Bluewaters Power 1 Pty Ltd,[31] Vaughan J observed that inadvertence 'is concerned with human error or oversight or being "not properly attentive"'.[32] A failure to register a security interest as a result of administrative errors in the input of information may constitute 'inadvertence' for the purposes of s 588FM(2)(a)(i).[33] Further, a bona fide attempt to register a security interest with deficiencies is capable of meeting the description 'inadvertence or some other sufficient cause'.[34]
2. Relevantly, extensions to the prescribed period have been granted in circumstances where a secured party registered its security interest against the ABN of the grantor rather than its ACN (in non-conformity with the PPS Regulations);[35] where the financing statements were properly registered against the ACN of each relevant corporate entity but not registered against the ABN of a trust in respect of which one of the defendants was trustee (again, in non-compliance with the PPS Regulations);[36] or where the security interest was not registered at all within the 20 business day period.[37] An extension was also granted in circumstances where the secured party was aware of the requirement to register but defectively registered its interests as 'transitional' when they were not and/or failed to select 'Purchase Money Security Interests' despite being characterised as such under the relevant agreements.[38]
3. A case involving facts analogous to those in the extant application is Commonwealth Bank of Australia v HM Aircraft Holdings Pty Ltd.[39] There, the Commonwealth Bank of Australia ('CBA') had registered interests in aircraft and aircraft components against incorrect collateral subclasses and, in some instances, contrary to the requirements of the PPS Regulations. Justice Beach accepted that the causes of the registration errors were various 'data entry errors', 'inadvertent mischaracterisations ... of the asset class or asset category' and 'failures by CBA staff to appreciate the requirements in the PPS Regulations' for registering security interests.[40] His Honour considered that each of those causes was a failure that was accidental or due to inadvertence and brought about by a combination of 'unnecessary complexity' in the legislative regime along with system deficiencies within CBA.[41] Further, the problem arose not because of any wholesale ignorance of the legislative regime or of the consequences of non-registration.[42]
4. I turn then to the facts and circumstances of this case. As previously noted, the GSA was executed on 11 July 2025. This was the date the 'security agreement that gave rise to the security interest came into force' for the purposes of s 588FL(2)(b)(ii).[43] The final day of the 20 business day period prescribed by that subsection fell on 8 August 2025. The earlier registration and the later registration were registered on 30 July 2025 and 16 September 2025, respectively.
5. I consider Mr Savage's failure to register the later registration by 8 August 2025 was a result of an accident or inadvertence on his part. I hold that view having regard to the following matters:

(a) Mr Savage was generally aware of the requirement to register his security interest based on the advice he received from his accountant. However, Mr Savage did not seek legal advice about the amended loan agreement or the GSA;

(b) again, without seeking legal assistance, Mr Savage attempted to register his security interest himself, which was done within the 20 business day period and resulted in the earlier registration;

(c) in undertaking the earlier registration, he specified the incorrect collateral class (i.e. 'Financial property - Currency'), whereas he ought to have selected the collateral class, 'All present and after-acquired property - No exceptions', having regard to the terms of the GSA. He selected currency as the collateral class because he had 'advanced funds (currency) to the defendant' and thought it was the appropriate class to choose. In other words, he says his error was based on a misunderstanding as to the correct collateral class he was required to specify;

(d) I accept Mr Savage's account of what occurred. I also accept counsel's submission that Mr Savage's explanation is understandable having regard to the fact he 'navigated the PPSR thicket' himself and without any prior experience in lending to a business;

(e) Mr Savage's error was an inadvertent mischaracterisation of the collateral class for his security interest. It was not simply an administrative or data entry error. He intentionally, but erroneously, selected currency as the collateral class;

(f) in doing so, he failed to understand the legal significance and consequences of specifying the incorrect collateral class;

(g) until he was informed by his brother on 16 September 2025 about the problem with the earlier registration, he was unaware of the need to register a further financing statement specifying the collateral class was in fact an AllPAAP. By that time, the requisite 20 business day period had already passed.

1. In attending to the earlier registration, I consider that Mr Savage made a 'bona fide attempt'[44] to register the security interest granted to him by Ionic. His failure to specify the correct collateral class, which ultimately caused the failure to register a security interest in accordance with the terms of the GSA within time, was innocent. It did not result from any known or reckless disregard of the statutory requirements of the legislative regime or the failure to register the interest. After Mr Savage realised the earlier registration was in error, he sought to rectify the error by registering the later registration on 16 September 2025 and then promptly instructing his lawyers to prepare this application.
2. Because I have found there was inadvertence, it is strictly unnecessary for me to address the just and equitable ground in s 588FM(2)(b). However, for the sake of completeness, I will deal with that ground briefly.

1. It has been observed that s 588FM(2) of the Corporations Act confers a broad judicial discretion that is informed (at least on one level) by what is 'just and equitable' and, accordingly, 'is to be read liberally for the purpose intended by the statute in question and is not to be constrained or limited by glosses or implications not found in the relevant statute'.[45]
2. As Waller J stated in the recent case of Re Dairy Soils Pty Ltd (in liq) ('Re Dairy Soils'):[46]

The phrase 'on other grounds, it is just and equitable to grant relief' in s 588FM(2)(b) does not suggest that considerations of justice and equity are irrelevant to the first two grounds. Rather, the reference to 'other grounds' indicates that s 588FM(2)(b) provides a residual equitable jurisdiction for circumstances not captured by the specific tests of inadvertence or absence of prejudice. However, as the authorities demonstrate, even where inadvertence under s 588FM(2)(a)(i) is clearly established, the Court's discretion under s 588FM is informed by broader considerations of justice and equity in determining whether relief should be granted and on what terms.[47]

1. The circumstances that would justify an order extending the time for registration on the just and equitable ground will depend upon the facts of each particular case.[48] In KJ Renfrey Nominees Pty Ltd (atf the Renfrey Family Trust) v Onesteel Manufacturing Pty Ltd (subject to deed of company arrangement) ('KJ Renfrey Nominees'),[49] a secured creditor and a company's deed administrators had resolved a prior dispute about whether a security interest had been properly registered on the PPSR by agreeing that there would be new security interests granted in the relevant assets. However, while the security interest was registered within 20 business days of coming into force, it was nevertheless registered after the 'critical time', being the time of the appointment of voluntary administrators to the company. As a consequence, the parties were concerned that the newly granted security interest might automatically vest in the company by force of s 588FL(4) of the Corporations Act. Justice Davies was ultimately satisfied that it was just and equitable to extend the time for registration of the security interests in circumstances where they were created as part of a commercial settlement of a dispute; the continued use of the encumbered assets were necessary for the ongoing operations of the company's business in furtherance of the objects of Pt 5.3A of the Corporations Act; and there was no delay in the registration.[50]
2. Whilst the circumstances of the present case are not as compelling as those in KJ Renfrey Nominees, it seems to me that the just and equitable jurisdiction nevertheless has work to do here. I accept the submission that Mr Savage would not have agreed to the terms of the amended loan agreement and an extension of time for repayment of the loan monies unless he was provided with adequate security. Ionic has had the ongoing benefit of Mr Savage's loan monies since that time. Further, the current directors of the company do not oppose the fixing of a later time for the registration of his security interest under the GSA.
3. I also accept the submission that a number of the facts justifying relief under the inadvertence ground also lend themselves to relief under the just and equitable ground. Mr Savage's attempt to engage with what is a labyrinthine statutory scheme resulted in his innocent mischaracterisation of the collateral class of his security interest. Whilst a financing statement with a broader collateral class could have been registered, because of Mr Savage's mistake, that did not occur. Immediately on becoming aware of his error, Mr Savage took steps to redress the problem by lodging the later registration and commencing this application within a further two weeks of doing so. For reasons already explained, his earlier registration in the narrower collateral class of 'Financial property - Currency' did not perfect a security interest in the wider collateral class, being 'All present and after-acquired property - No exceptions'. Unless an extension order is made in respect of the later registration, his security interest is liable to vest in the grantor in the event of the company's later insolvency.
4. I consider the just and equitable jurisdiction to be engaged in all the circumstances.

1. Given the Court's jurisdiction under s 588FM is triggered, it is then necessary for the Court to exercise its discretion judicially in determining whether to make the orders sought, including on terms and conditions.[51] The question of whether the Court should exercise its discretion will inevitably turn on the facts and circumstances of the case.[52] In Re Dairy Soils, Waller J further explained:[53]

It is important to distinguish between the jurisdictional requirements under s 588FM(2) and the exercise of discretion under s 588FM. Establishing one of the three grounds in s 588FM(2) confers jurisdiction on the Court to make an order, but does not compel the Court to do so. The use of the word 'may' in both s 588FM(2) and s 588FM(3) makes clear that the Court retains a discretion whether to grant relief even where a jurisdictional ground is established...[54]

1. Factors which may impact the exercise of the Court's discretion include delay and the presence or absence of prejudice to creditors or shareholders.[55]
2. Because secured creditors are not affected by the making of an order under s 588FM, the real focus of any potential prejudice is on unsecured creditors. As Brereton J observed in Re Appleyard Capital Pty Ltd ('Re Appleyard'),[56] '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'.[57] It may be that unsecured creditors would be in no different position had the security interest been registered on time.[58] The type of prejudice often in question is the prejudice attributable to the delay in registration, rather than prejudice resulting from the making of the extension order under s 588FM (which is inevitable).[59] However, there appear to be differing views on the appropriate exercise of discretion where the grantor company has already entered into a winding up or other external administration. In Re Dairy Soils, Waller J recently held that the crystallisation of creditor rights upon liquidation represents a qualitatively different situation from cases where liquidation is merely prospective.[60] His Honour followed the approach of Moshinsky J in Kaizen Global Investments Ltd v Australia New Agribusiness & Chemical Group Ltd (in liq) & Ors,[61] who stated that whether it is appropriate to grant relief after a grantor company has gone into external administration will require the identification of factors of sufficient significance to outweigh the adverse impact on unsecured creditors of the grant of relief.[62] Ultimately, Waller J declined to make an order extending time under s 588FM because he considered the making of such an order would cause substantial prejudice to unsecured creditors in circumstances where the delay in registration of approximately three and a half years had been substantial.[63] By contrast, in the earlier case of Re Appleyard, Brereton J relevantly held that:[64]

[A]n order can be made, even after liquidation, so long as the circumstances are such as to render it just and equitable to grant relief, notwithstanding that the grant of relief will defeat rights of unsecured creditors.

1. Justice Brereton further stated:[65]

An approach that regarded an adverse impact on the interests of unsecured creditors as practically conclusive...[would mean] the jurisdiction created by s 588FM would be devoid of practical utility, as the only cases in which an order would be made would be cases in which there was no need for one because the company was manifestly solvent, and would not go into administration or liquidation within 6 months.[66]

1. Here, it is unnecessary for the Court to further explore the tensions in the authorities and to focus on the prejudice arising from an order under s 588FM because the plaintiff has not made his application on the basis the grantor company is already in external administration.
2. The potential prejudice to unsecured creditors should be considered in light of the delay in the registration of the security interests. That is because delay has the potential to impact unsecured creditors who may have dealt with the company on the basis that its assets were unencumbered.[67] In other words, unsecured creditors may have changed their position to their detriment. The period of delay in effecting the registration is relevant, because the shorter the delay the less likely the failure to register within time will have any impact.[68]
3. In Re Bellerine Heights,[69] Sloss J undertook a review of cases in which relief under s 588FM of the Corporations Act had been granted despite lengthy delays, stating:[70]

...there are a number of cases where orders have been made under s 588FM in circumstances where the delay has exceeded 12 months.[71] In Re Psyche Holdings Pty Ltd,[72] Ward CJ in Eq granted relief under section 588FM, despite a five year delay between the date on which the registration of the security interest should have been made and the date on which the application was made. In Re Amotran Pty Ltd[73] a bank (being the successor in law to the original bankers) discovered almost five years after the general security agreement was executed that its registration on the PPS Register was defective (because the security interest had not been registered against the ABN of the trust). Additionally, it took another five months between the time the bank identified the defect and re-registering the security interest.

1. Another consideration in assessing potential prejudice arising from delay in registration is whether there were any other registered AllPAAP securities which would have been apparent to an unsecured creditor searching the PPSR.[74] Where an earlier AllPAAP security had been registered, it is unlikely that any unsecured creditors would have dealt with the defendant company on the basis that the relevant collateral was unencumbered.[75]
2. In weighing the potential prejudice of unsecured creditors, the Court will also consider whether the grantor is solvent and financially secure and the likelihood of its solvency being maintained into the foreseeable future.[76] In Re Transurban CCT Pty Ltd (in its own capacity and as trustee for the Transurban CCT Trust),[77] Brereton J stated:[78]

...Thus it is relevant to consider the financial position of the company, because if the company is shown to be financially secure and it is unlikely that a "critical day" will arise in the foreseeable future and solvency is established, that is likely to be the end of the matter. On the other hand, where the Court cannot be satisfied that there is no risk that unsecured creditors could be adversely affected, they are entitled to be heard against the making of the order, although that may be sufficiently achieved, depending on the degree of risk involved, by suspending the operation of the order or imposing a term reserving leave to apply to set it aside in the event of a liquidation or administration.

1. An order may be made joining a representative creditor or otherwise making directions as to the notification of unsecured creditors so that they may elect to oppose the application.[79] The reservation to unsecured creditors and others of liberty to apply is often referred to as a 'Guardian Securities condition', which takes its name from the case of Re Guardian Securities Ltd.[80] A Guardian Securities condition is typically imposed where it is unclear whether creditors will be adversely affected because the company may, or may not, go into external administration within six months,[81] and in which case they are entitled to be heard against the making of the order.[82] Extensions under s 588FM have been granted with an accompanying Guardian Securities condition even where administration or liquidation is in contemplation.[83]
2. Returning then to the facts and circumstances of the present application, it is appropriate to examine the extent of prejudice that may be suffered by unsecured creditors as a consequence of the delay in registration and the related question of the company's solvency.
3. As to the extent of the delay, the following time periods are apparent:

(a) a period of approximately seven weeks passed between the earlier registration (i.e. 30 July 2025) and the later registration (i.e. 16 September 2025);

(b) a period of approximately five and a half weeks passed between the expiry of the 20 business day period within which the plaintiff's security interest under the GSA was required to be registered (i.e. 8 August 2025) and the later registration (i.e. 16 September 2025); and

(c) a period of approximately nine and a half weeks passed between the date of the grant of the security interest under the GSA (i.e. 11 July 2025) and the later registration (i.e. 16 September 2025).

1. The most relevant time period is the five and a half weeks of delay since the date Mr Savage was required to register his security interest on the PPSR and the later registration. The delay is limited and has been properly explained. As earlier mentioned, once informed of the error in his earlier registration on 16 September 2025, Mr Savage entered the later registration the same day. He also did not delay in bringing this application approximately two weeks later.
2. Nevertheless, it is possible that during the period of delay an unsecured creditor may have arranged their affairs on the basis that Ionic's property was unencumbered or, rather, not encumbered to the extent of the security interest granted under the GSA. However, I accept the submission that the risk of an unsecured creditor checking the register and extending credit to the company, or otherwise significantly altering their position, on the basis that property of the company was not encumbered to its true extent is lower than in cases where longer periods of delay in registration (such as 12 months[84] or even five years)[85] have occurred.
3. Counsel for Mr Savage submitted that the existence of the earlier registration on the PPSR during the intervening period and prior to the later registration would have operated to alert creditors to the fact there was an existing security interest over Ionic's property and thereby ameliorated any potential prejudice. To some extent, that may be true. However, the earlier registration was in respect of a narrower collateral class than that actually granted by the company under the GSA and did not represent the true state of affairs. Although it may have been open to a creditor to seek clarification from the company about the nature of Mr Savage's security interest, the likelihood of that occurring is speculative.
4. At the same time, the evidence concerning the financial position of the company is equivocal and incomplete. Mr Savage has not investigated Ionic's dealings with its unsecured creditors and the company has not filed any material in relation to this application. The company did provide an investment summary presentation and other information to Mr Savage in December 2024 which suggests it had: an enterprise value of $35 million; production revenue of $1 million per annum, with $200,000 in profit; and a 'pathway to revenues of over $12M p.a. ($9M gross profit in the [following] 18 months.' In addition, the company purported to have assets with a market value in excess of $1.7 million. It appears the company opened a factory and laboratory in 2022 and commenced trading in 2023 when it first derived revenue from the sale of conductive coatings produced on a commercial scale. However, Mr Savage was not provided with any externally prepared or audited financial documents for Ionic at the time he entered into the loan agreement or the amended loan agreement.
5. As already noted, in early December 2024, Ionic was raising pre-IPO financing of $5 million but had an immediate need of the $500,000 loan from Mr Savage. Its capital raising efforts were ongoing as at February 2025. Notably, in July 2025, the company requested an extension of time from Mr Savage for repayment of monies owing under the loan agreement. In other words, it is unclear whether it had capacity to repay the loan in accordance with the original terms. However, as at the date of the hearing, a current Australian Securities and Investments Commission company extract confirmed that Ionic was not in external administration. Nor was there any notice of any winding up application recorded in the extract.
6. In summary, there is simply insufficient evidence to make a positive finding in relation to the solvency of the company or its financial position, but equally there is no evidence to suggest the company is facing an imminent risk of insolvency. Critically, at the time of the hearing, there was no evidence the rights of unsecured creditors had crystallised as a result of any insolvency event.
7. Because the evidence in relation to the solvency of Ionic as grantor is inconclusive, there is some risk of potential prejudice to the interests of unsecured creditors. Whilst the risk does not appear to be significant, it cannot be ignored. Accordingly, in extending time under s 588FM of the Corporations Act, I consider it appropriate to include a Guardian Securities condition to protect the interests of unsecured creditors. They will have liberty to apply to discharge the order granting the extension of time to register Mr Savage's security interest if there is a winding up, an administrator is appointed, or the company executes a deed of company arrangement within six months of the date of the later registration (i.e. by 16 March 2026). I accept the imposition of a Guardian Securities condition is preferable to suspending the operation of an order, joining a representative creditor, or directing that Mr Savage give notice to creditors. That is because of the relative level of risk to creditors, given the short delay in the later registration, and the adequacy of the protection afforded by a Guardian Securities condition.
8. Lastly, in relation to the position of shareholders, because Ionic is a public unlisted company, there may be some practical difficulty in notifying each of its shareholders. However, given the company does not appear to be on the brink of insolvency, I consider the potential prejudice to shareholders is minimal and does not tend against the making of an extension order under s 588FM of the Corporations Act.

1. In the result, I will exercise my discretion to fix a later time for registration under s 588FM of the Corporations Act in respect of the later registration made by the plaintiff on 16 September 2025. I will make the orders in the Annexure to these reasons.

1. Pursuant to s 588FM(1) of the Corporations Act 2001 (Cth) ('Act'), 16 September 2025 be fixed as the later time for the plaintiff to register a financing statement on the Personal Property Securities Register for the purposes of s 588FL(2)(b)(iv) of the Act for the security interest in collateral referred to in the registration numbered '202509160009044'.
2. Liberty be reserved to any liquidator, administrator, deed administrator or unsecured creditor of the defendant to apply to discharge or vary order 1 if any winding up of the defendant occurs, or an administrator is appointed to the defendant under ss 436A, 436B or 436C of the Act, or the defendant executes a deed of company arrangement, within six months of 16 September 2025.
3. The plaintiff shall forthwith serve a sealed copy of these orders on the defendant.
4. There be no order as to costs.

[1] See International Organization for Standardization, Nanotechnologies - Vocabulary - Part 13: Graphene and related two-dimensional (2D) materials, ISO/TS 80004-13:2024, 2nd ed, September 2024.

[2] See Huanxin Li et al, 'Van-der-Waals-forces-modulated graphene-P-phenyl-graphene carbon allotropes' (2025) 16:10011 Nature Communications.

[3] By order dated 6 October 2025, Connock J referred the originating process to an Associate Judge for hearing and determination pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) and, if required, also pursuant to r 16.1(3) of the Supreme Court (Corporations) Rules 2023 (Vic).

[4] Re Appleyard Capital Pty Limited; 123 Sweden AB v Appleyard Capital Pty Limited (2014) 101 ACSR 629, 634-635 (Brereton J) ('Re Appleyard Capital'); Re Accolade Wines Australia Ltd [2016] NSWSC 1023, [10], [21] (Brereton J) ('Re Accolade Wines').

[5] See Re Bellerine Heights Pty Ltd [2020] VSC 874, [17] (Sloss J) ('Re Bellerine Heights'), referring to Re David Brown Gear Industries Pty Ltd [2017] NSWSC 907; Re Appleyard Capital.

[6] Thomson Reuters, Personal Property Securities in Australia (online) [25.110] ('Personal Property Securities').

[7] 'Collateral' is defined in s 10 of the Personal Property Securities Act 2009 (Cth) ('PPSA') to include personal property to which the security interest is attached.

[8] See definition of 'effective' in s 10 of the PPSA.

[9] Simpson v New Zealand Associated Refrigerated Food Distributors Ltd [2006] NZCA 517; [2007] 2 NZLR 130, 136 (Robertson J). See also Personal Property Securities [PB.13.10].

[10] See Future Revelation Ltd v Medica Radiology & Nuclear Medicine Pty Ltd [2013] NSWSC 1741; (2013) 283 FLR 122, 123-124 (Brereton J), citing the Canadian authorities of Re Lambert (1994) 20 OR (3d) 108; GMAC Leaseco Ltd v Moncton Motor Home & Sales (2003) 227 DLR (4th) 154, [58].

[12] [2006] NZCA 517; [2007] 2 NZLR 130.

[16] Ibid 633; Re Accolade Wines [12]. See also Personal Property Securities [25.1940].

[17] The term 'Court' is defined in s 58AA of the Corporations Act 2001 (Cth) ('Corporations Act') to include the Supreme Court of a State or Territory.

[19] [2021] NSWSC 1122 ('Re Antqip Hire').

[21] Re Appleyard Capital 635; Re Accolade Wines [10], [21].

[22] Re Appleyard Capital 634-635; Re Accolade Wines.

[23] Re OneSteel Manufacturing Pty Ltd (admin apptd) [2017] NSWSC 21; (2017) 93 NSWLR 611, 635 (Brereton J).

[24] [2013] NSWSC 32

[26] Re Appleyard Capital 633; Re Psyche Holdings Pty Ltd [2018] NSWSC 1254, [30]-[31] (Ward CJ in Eq); Bluewaters Power 1 Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2019] WASC 438 [39] (Vaughan J) ('Bluewaters').

[27] Section 10 of the PPSA defines 'financial property' to include 'currency' which, in turn, means 'currency authorised as a medium of exchange by the law of Australia or for any other country.'

[28] See Personal Property Securities [PB.13.10].

[29] [2016] NSWSC 1023.

[31] [2019] WASC 438.

[32] Ibid [40], citing National Australia Bank Ltd v Davis & Waddell (Vic) Pty Ltd [2003] VSC 1; (2003) 44 ACSR 296, 309-310; Re Ace Funding Ltd [2003] FCA 59; (2003) 44 ACSR 363, 365.

[33] CBFC Ltd v Corporate Consulting (Aust) Pty Ltd [2010] QSC 395, [18] (Boddice J) (applying the predecessor provision s 266(4) of the Corporations Act).

[34] Re Transurban CCT Pty Ltd and Transurban CCT Nominees Pty Limited in its own capacity and as Trustee of the Transurban CCT Trust [2014] NSWSC 1909, [8] (Brereton J) ('Transurban CCT').

[36] Transurban CCT. See also Re ABHG Contracting Pty Ltd & Ors [2023] VSC 263 ('Re ABHG Contracting').

[38] Northern Managed Finance Pty Ltd v 4 in 1 Wyoming Pty Ltd & Ors [2017] NSWSC 407; (2017) 120 ACSR 167, 171, 177-178 (Gleeson JA) ('Re 4 in 1 Wyoming').

[39] [2021] FCA 447; (2021) 152 ACSR 63.

[43] See Re Antqip Hire [49] (Brereton JA).

[44] See Transurban CCT [8]; Re 4 in 1 Wyoming 178; Re ABHG Contracting [50].

[45] Kaizen Global Investments Ltd v Australia New Agribusiness & Chemical Group Ltd (in liq) & Ors [2017] FCA 431; (2017) 120 ACSR 220, 241 (Moshinsky J) ('Kaizen Global'), citing Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd & Ors [2003] FCAFC 256; (2003) 135 FCR 206, 264 (Allsop J, as his Honour then was, with Whitlam J agreeing 213-214 and Branson J agreeing 216-217), which was a decision made in relation to the former and now repealed s 266(4) of the Corporations Act ('Hewlett Packard').

[46] [2025] VSC 540, [42] ('Re Dairy Soils').

[47] Whilst the decision is currently under appeal (proceeding S EAPCI 2025 0138), the grounds of appeal do not appear to take issue with this formulation of principle.

[48] KJ Renfrey Nominees Pty Ltd (atf the Renfrey Family Trust) v Onesteel Manufacturing Pty Ltd (subject to deed of company arrangement) [2017] FCA 325; (2017) 120 ACSR 117, 127 (Davies J).

[51] Re Greenleaf Renewables Pty Ltd [2025] FCA 763, [8] (Cheesman J).

[54] Whilst the decision is currently under appeal (proceeding S EAPCI 2025 0138), the grounds of appeal do not appear to take issue with this formulation of principle.

[55] See Re Bellerine Heights [56]-[58].

[56] (2014) 101 ACSR 629.

[59] Re Appleyard Capital 634-635; Re Accolade Wines [18]; Adia Venture Ltd v Traffic Technologies Ltd [2025] FCA 564 [28] (O'Callaghan J) ('Adia Venture').

[61] [2017] FCA 431; (2017) 120 ACSR 220.

[62] Kaizen Global 241, citing Hewlett Packard 218.

[63] Re Dairy Soils [98], [101], [104]-[105], [114]-[115]. The decision is currently under appeal (proceeding S EAPCI 2025 0138).

[66] See also Brereton JA's decision in Re Antqip Hire, in which his Honour held (at [82]) that 'prejudice arising from making the order, by removing assets from the divisible pool in favour of the secured creditor to the detriment of unsecured creditors, is of limited importance, given that that will be the effect of granting relief in any case in which relief is actually required.'

[67] Re Appleyard Capital 640; Re Accolade Wines [18]; Bluewaters [53].

[68] Re Appleyard Capital 640; Re Accolade Wines [18].

[69] [2020] VSC 874.

[71] In Re Amotran Pty Ltd [2017] VSC 637, [22] n 31 ('Re Amotran'), Judd J observed that the delay in Re Appleyard Capital was 12 months and in Re 4 in 1 Wyoming the delay was 15 months.

[72] [2018] NSWSC 1254.

[73] [2017] VSC 637.

[76] Bluewaters [54]; Re Cardinia Nominees Pty Ltd [2013] NSWSC 32, [20] (Black J) ('Re Cardinia Nominees'); Re Guardian Securities Ltd [1984] 1 NSWLR 95, 97-98 (McLelland J); Bevillesta Pty Ltd v Imagine UN Ltd [2009] VSC 50; (2009) 69 ACSR 574, 579-581 (Robson J) ('Bevillesta'); Re Appleyard Capital 638; Re Bellerine Heights [51]-[55]; Adia Venture [24].

[77] [2014] NSWSC 1909.

[78] Ibid [10], citing Re Appleyard Capital 638 and adopted in Re Bellerine Heights [50].

[79] Bevillesta 581; Re Cardinia Nominees [20].

[80] [1984] 1 NSWLR 95.

[81] See Re Cardinia Nominees [20]; Re Appleyard Capital 638; Bluewaters [54]; Re Accolade Wines [43]; Re Bellerine Heights [52], [74].

[82] Re Appleyard Capital 638; Bluewaters [54].

[83] Bluewaters [59]; Re Bellerine Heights [52]; Re Appleyard Capital 639.

[84] Re Appleyard Capital. See also Re 4 in 1 Wyoming where the delay was 15 months.