In the matter of Eticore SD Pty Ltd [2021] NSWSC 110

In the matter of Eticore SD Pty Ltd [2021] NSWSC 110

The delay in registering Eticore ST's security interest was caused by accident or inadvertence arising from oversight and error by the solicitors acting on the transaction, with no disregard by Eticore ST of its obligations. Eticore SD, the grantor, was joined and consented; no other party needed to be joined because the order would not affect priority; the delay was short; and any risk to unsecured creditors could be addressed by preserving an external administrator's liberty to apply. It was therefore appropriate to fix 2 February 2021 as the registration time for the security interests under s 588FM.

Jurisdiction
Australia
Judgment Date
19 February 2021
Procedural Posture
Application Under S 588 FM of the Corporations Act 2001 (cth) to Fix a Later Registration Time for a PPSA Security Interest / Originating Process; Principal Judgment After Orders Made on 16 February 2021
Outcome
Application granted.
Legal Topics
['registration Time for Security Interests' 'corporations Act 2001 (cth) Ss 588 FL and 588 Fm' 'personal Property Securities Register' 'inadvertence in Late Registration' 'protection of Creditors and External Administrators']
['corporations' 'personal Property Securities'] ['registration Time for Security Interests' 'corporations Act 2001 (cth) Ss 588 FL and 588 Fm' 'personal Property Securities Register' 'inadvertence in Late Registration' 'protection of Creditors and External Administrators']

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Procedural Posture

Application Under S 588 FM of the Corporations Act 2001 (cth) to Fix a Later Registration Time for a PPSA Security Interest / Originating Process; Principal Judgment After Orders Made on 16 February 2021

Legal Issues

  1. 1 ["Whether the Court should fix 2 February 2021 as the registration time for Eticore ST's security interest for the purposes of s 588FL(2)(b)(iv) of the Corporations Act 2001 (Cth)." 'Whether the failure to register the security interest within the 20 business day period was accidental or due to inadvertence or some other sufficient cause.' 'Whether affected parties needed to be joined or heard, including the grantor Eticore SD and another secured creditor, Commonwealth Bank of Australia.' 'Whether the position of creditors or shareholders would be prejudiced and whether any protection should be given to an external administrator appointed within six months.']

Ratio Decidendi

The delay in registering Eticore ST's security interest was caused by accident or inadvertence arising from oversight and error by the solicitors acting on the transaction, with no disregard by Eticore ST of its obligations. Eticore SD, the grantor, was joined and consented; no other party needed to be joined because the order would not affect priority; the delay was short; and any risk to unsecured creditors could be addressed by preserving an external administrator's liberty to apply. It was therefore appropriate to fix 2 February 2021 as the registration time for the security interests under s 588FM.

Court Disposition

Application granted.

Orders

  • ['The registration time for the security interests granted to the Plaintiff is fixed pursuant to s 588FM of the Corporations Act 2001 (Cth) as 2 February 2021.']