Celtic Capital Pty Ltd. Vs. Sky And Space Company Ltd. - (21 Jul 2023)

A security interest in collateral is perfected, if the security interest is attached to the collateral

Civil

On 28 November 2022, Sky and Space Company Ltd (SAS) granted Celtic Capital Pty Ltd (Celtic) a security interest in its personal property. A registration with respect to that security interest ought to have been entered onto the Personal Property Securities Register (PPSR) by 28 December 2022, but instead it was registered on 29 June 2023.

Celtic applies by originating process under Section 588FM(1) of the Corporations Act, 2001 for an order that the time for registering its security interest on the PPSR against SAS be extended to 29 June 2023 for the purposes of Section 588FL(2)(b)(iv) of the Corporations Act (and for ancillary orders). Celtic has brought the application on an urgent basis given that the enforceability of its security interest remains at risk until the relief sought is granted. Celtic seeks orders to abridge the time for service and the hearing of the application.

If an interest in personal property falls within the meaning of 'security interest' within Section 12 of the PPSA, it is an interest to which the PPSA applies. Section 21 of the Personal Property Securities Act, 2009 (PPSA) provides that a security interest in collateral is perfected if the security interest is attached to the collateral, the security interest is enforceable against a third party (for example, by way of a written agreement under Section 20(2) of the PPSA) and (among several options) a registration is effective with respect to the collateral.

The 'critical time' is defined in Section 588FL(7) of the Corporations Act as the date on which the administration, winding up or restructuring is taken to have commenced. Therefore, where the security interest is not registered within 20 days after the grant of the security interest and the registration occurs in the six months prior to the appointment of an external administrator to the grantor of the interest, the security vests in the grantor. This vesting is irreversible.

The failure to register the Security Interest within the time prescribed by Section 588FL(2)(b)(ii) of the Corporations Act was due to inadvertence. Furthermore, any prejudice that may be suffered due to the delay in registering is ameliorated by reserving a right to third parties to apply in relation to the extension of time. Pursuant to Section 588FM of the Corporations Act, 2001, 29 June 2023 be fixed as the later time for the purposes of Section 588FL(2)(b)(iv) of the Act in respect of any security interest granted by the Defendant in favour of the Plaintiff.

Tags : REGISTRATION SECURITY INTEREST TIME