Exception Holdings Pty Ltd v Albarran (No 2) [2005] NSWSC 981

Exception Holdings Pty Ltd v Albarran (No 2) [2005] NSWSC 981

The interlocutory process failed because retrospective leave to enforce the charge could not be given after enforcement without prior leave under s 267(3); in any event the cross-claimant did not establish Exception Holdings Pty Ltd's solvency at the relevant dates. Although leave to reopen was appropriate, any oral charge merged in the executed deed of fixed and floating charge, and subrogation was unavailable because the estate obtained the security for which it bargained before that security later became void through enforcement without leave.

Jurisdiction
Australia
Judgment Date
29 September 2005
Procedural Posture
Interlocutory Application in Corporations List Proceedings / Application for Leave to Enforce Charge Under Corporations Act 2001 (cth), S 267(3), Alternative Oral Charge and Subrogation Relief
Outcome
Interlocutory process dismissed with costs.
Legal Topics
['void Company Charge' 'leave to Enforce Charge' 'insolvency and Solvency Test' 'nunc Pro Tunc Orders' 'equitable Subrogation' 'oral Equitable Charge' 'merger of Oral Agreement in Deed' 'leave to Reopen']
['corporations Law' 'equity' 'civil Procedure'] ['void Company Charge' 'leave to Enforce Charge' 'insolvency and Solvency Test' 'nunc Pro Tunc Orders' 'equitable Subrogation' 'oral Equitable Charge' 'merger of Oral Agreement in Deed' 'leave to Reopen']

Case Brief

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Procedural Posture

Interlocutory Application in Corporations List Proceedings / Application for Leave to Enforce Charge Under Corporations Act 2001 (cth), S 267(3), Alternative Oral Charge and Subrogation Relief

Legal Issues

  1. 1 ['Whether leave under Corporations Act 2001 (Cth), s 267(3) could be granted retrospectively nunc pro tunc after a step had been taken to enforce the charge without leave.' 'Whether Exception Holdings Pty Ltd was solvent immediately after creation of the charge for the purposes of s 267(3).' 'Whether leave should be granted to reopen so that oral charge and subrogation arguments could be ventilated.' 'Whether an alleged oral agreement created an equitable charge and whether any oral charge merged in the later deed of fixed and floating charge.' 'Whether time should be extended under Corporations Act 2001 (Cth), s 266(4) to notify ASIC of any oral charge.' "Whether the estate was entitled by subrogation to Westpac Banking Corporation's security after its advances were used to discharge Westpac indebtedness."]

Ratio Decidendi

The interlocutory process failed because retrospective leave to enforce the charge could not be given after enforcement without prior leave under s 267(3); in any event the cross-claimant did not establish Exception Holdings Pty Ltd's solvency at the relevant dates. Although leave to reopen was appropriate, any oral charge merged in the executed deed of fixed and floating charge, and subrogation was unavailable because the estate obtained the security for which it bargained before that security later became void through enforcement without leave.

Court Disposition

Interlocutory process dismissed with costs.

Orders

  • ['The interlocutory process is dismissed with costs.']