B & B Budget Forklifts Pty Ltd v CBFC Ltd & 2 Ors [2008] NSWSC 271

B & B Budget Forklifts Pty Ltd v CBFC Ltd & 2 Ors [2008] NSWSC 271

CBFC's charge was a fixed charge over 122 specifically identified forklifts: the agreement described a first mortgage over those goods, prohibited sale, mortgage or disposal without consent, and gave CBFC enforcement rights, while Smeaton had no right to put the goods beyond the charge. Letting the forklifts on hire, the inclusion of replacement goods, and default notice provisions did not convert the security into a floating charge. Because B&B's registered charge was a floating charge, CBFC's fixed charge was created before B&B's charge became fixed, and no notice under s 279(3)(b) had been lodged, s 279(3) deemed B&B to have consented to postponement. Section 279(2) therefore displaced...

Jurisdiction
Australia
Judgment Date
01 April 2008
Procedural Posture
Equity Division Corporations List Proceedings for Declaratory Relief Concerning Priority of Competing Security Interests / Principal Judgment After Hearing
Outcome
Plaintiff's claim for declaratory relief dismissed with costs; CBFC's charge has priority and the fund should be transferred to CBFC.
Legal Topics
['competing Security Interests' 'registered Charges' 'fixed Charge and Floating Charge' 'purchase Money Security' 'priority of Charges' 'voluntary Administration and Creditors Voluntary Winding Up']
['mortgages' 'corporations' 'corporate Finance'] ['competing Security Interests' 'registered Charges' 'fixed Charge and Floating Charge' 'purchase Money Security' 'priority of Charges' 'voluntary Administration and Creditors Voluntary Winding Up']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Equity Division Corporations List Proceedings for Declaratory Relief Concerning Priority of Competing Security Interests / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether CBFC\'s charge was a "fixed charge" for the purposes of s 279(3) of the Corporations Act 2001 (Cth).' "Whether B&B was deemed by s 279(3) to have consented to postponement of its prior registered floating charge to CBFC's subsequent registered fixed charge." "Whether CBFC's charge was not fully competing with B&B's charge because it was a purchase money security." 'Whether the priority otherwise afforded by s 280 of the Corporations Act 2001 (Cth) was displaced.']

Ratio Decidendi

CBFC's charge was a fixed charge over 122 specifically identified forklifts: the agreement described a first mortgage over those goods, prohibited sale, mortgage or disposal without consent, and gave CBFC enforcement rights, while Smeaton had no right to put the goods beyond the charge. Letting the forklifts on hire, the inclusion of replacement goods, and default notice provisions did not convert the security into a floating charge. Because B&B's registered charge was a floating charge, CBFC's fixed charge was created before B&B's charge became fixed, and no notice under s 279(3)(b) had been lodged, s 279(3) deemed B&B to have consented to postponement. Section 279(2) therefore displaced...

Court Disposition

Plaintiff's claim for declaratory relief dismissed with costs; CBFC's charge has priority and the fund should be transferred to CBFC.

Orders

  • ['The claim of B&B, as plaintiff, for declaratory relief is dismissed with costs.' "The fund in the liquidator's hands should be transferred to CBFC."]