On 5 July 2012, Yates J of the Federal Court delivered judgment in Carson, in the matter of Hastie Group Limited (No. 3)  FCA 719. This case considered the rights and obligations of Administrators of a group of companies in voluntary administration, where interests of other parties had been registered on the Personal Properties Securities Register (PPSR).
The Administrators’ particular difficulty arose from the existence of plant and equipment at various sites operated by the group of companies, in circumstances where the Administrators were unable to determine whether that plant and equipment was held subject to a security interest and where it was becoming uneconomical to keep storing it.
Shortly after their appointment, the Administrators had written to creditors who had registered interests on the PPSR, and asked them to specify the goods in which they held an interest. Most creditors did not respond at all, and among those that did, not all adequately specified the property in which they had registered an interest.
In the face of the numerous efforts, including news paper advertisements, of the Administrators to bring the matter to creditors’ attention, the Court ordered that the Administrators were at liberty to sell the plant and equipment. The proceeds of sale were ordered to be applied first to the interests of creditors who were able to identify plant and equipment to which their security interests applied. The result is likely to be a headache for the liquidators, which will result in more of the money that should have been available to creditors being spent on their costs and remuneration and delay to the finalisation of the administration of the company and the payment of creditors’ claims.
This case highlights the necessity for creditors to be vigilant once interests are registered on the PPSR, to respond promptly to any correspondence from administrators or liquidators appointed to debtor companies, and in doing so, or in registering their interests, to identify so far as possible the particular property over which the interest is registered. Creditors should also be careful to keep their own contact details up to date on the PPSR, so that any correspondence addressed to them will be received.
Such basic advice about good record keeping and responding to important communications is doubtless to be repeated by Courts as more cases on the PPSR are heard and determined.