The following decision of the Qld Supreme Court offers a practical insight into the difficulty of recovering property registered under the Personal Properties Securities Act 2009 (Cth). Read the analysis of Amy Dunphy and Anne Crittall:
This case highlights the difficulty of recovering property registered under the Personal Properties Securities Act 2009 (Cth) (PPSA) where that property is located in a different jurisdiction. It also provides a useful summary of the general principles regarding the transfer of proceedings under the Corporations Act 2001 (Cth).
The plaintiff, Bauer Equipment Australia Pty Ltd (lessor) and the first defendant (lessee) entered into a lease agreement relating to a BG28 piling drilling rig and a BCM19 gear box system (together, the Rig). The lessor registered a financing statement relating to the Rig in the Personal Property Securities Register under the PPSA. Following repeated failures by the lessee to pay monies owed under the lease, the lessor terminated the lease and demanded the return of the Rig.
On 1 December 2015 the second defendants were appointed administrators of the lessee (administrators).
The administrators denied the lessor's right to delivery up of the Rig contending that section 588FL(4) of the Corporations Act 2001 (Cth) operated to vest the security interest in the lessee upon the appointment of the administrators.
The lessor commenced proceedings in the Supreme Court of Queensland (proceedings) and the administrators filed proceedings in the Supreme Court of New South Wales.
The lessor subsequently filed an application for summary judgment contending that the administrators' arguments had no prospects of success.
The administrators argued that the proceedings should be transferred to New South Wales because all parties to the proceedings carried on business in New South Wales, the principal place of business of the lessee and its business records were there; the Rig was at all times in New South Wales; and the location of all witnesses were in New South Wales. The administrators also argued that despite an 'exclusive jurisdiction' clause which gave the lessor the right to elect the jurisdiction, the terms of that clause meant that at the time of agreement, it supported the proceedings being heard in New South Wales.
The court granted the administrators' application to transfer the proceedings to New South Wales.
Bond J held that the considerations favouring the transfer including the location of the Rig and all witnesses, and the terms of the exclusive jurisdiction clause meant that New South Wales was the most appropriate forum and the interests of justice required the proceeding be transferred.