Forge Group Power Pty Limited (in liquidation)(receivers and managers appointed) v General Electric International Inc [2016] NSWSC 52

Forge Group Power Pty Limited (in liquidation)(receivers and managers appointed) v General Electric International Inc [2016] NSWSC 52

The lease of the Turbines to Forge Power by GE was a PPS lease as defined by the Personal Property Securities Act 2009 (Cth), as GE was regularly engaged in the business of leasing goods both within and outside Australia at the time the lease was entered into; the Turbines did not become fixtures as their installation did not evince an objective intention of permanence; consequently, upon appointment of administrators, any security interest of the defendants in the Turbines vested in Forge Power immediately before that appointment under s 267(2) PPSA, giving Forge Power priority over the Turbines.

Parties
Plaintiff: Forge Group Power Pty Limited (in liquidation) (receivers and managers appointed) (ACN 103 678 324); First Defendant: General Electric International, Inc. (ABN 85 002 420 751); Second Defendant: Power Rental Op Co Australia LLC (ARBN 167 060 997); Third Defendant: Power Rental Asset Co Two, LLC
Jurisdiction
Australia
Judgment Date
11 February 2016
Procedural Posture
Principal Judgment / Judgment Delivered After Trial
Outcome
Plaintiff entitled to declaratory relief; plaintiff's title to Turbines is superior; interests of defendants in Turbines vested in plaintiff immediately before appointment of administrators.
Legal Topics
PPS Leases, Fixtures, Priority of Security Interests, Leasing of Goods, Attachment and Perfection Under PPSA, Effect of Vesting Provisions
Personal Property Securities Law Commercial Law PPS Leases Fixtures Priority of Security Interests Leasing of Goods Attachment and Perfection Under PPSA Effect of Vesting Provisions

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Parties

Forge Group Power Pty Limited (in liquidation) (receivers and managers appointed) (ACN 103 678 324)

Plaintiff

General Electric International, Inc. (ABN 85 002 420 751)

First Defendant

Power Rental Op Co Australia LLC (ARBN 167 060 997)

Second Defendant

Power Rental Asset Co Two, LLC

Third Defendant

Procedural Posture

Principal Judgment / Judgment Delivered After Trial

Legal Issues

  1. 1 Whether the lease is a PPS lease under the Personal Property Securities Act 2009 (Cth)
  2. 2 Whether the lessor (GE) was regularly engaged in the business of leasing goods within s 13(2)(a) PPSA
  3. 3 Whether the lease is excluded from being a PPS lease

Ratio Decidendi

The lease of the Turbines to Forge Power by GE was a PPS lease as defined by the Personal Property Securities Act 2009 (Cth), as GE was regularly engaged in the business of leasing goods both within and outside Australia at the time the lease was entered into; the Turbines did not become fixtures as their installation did not evince an objective intention of permanence; consequently, upon appointment of administrators, any security interest of the defendants in the Turbines vested in Forge Power immediately before that appointment under s 267(2) PPSA, giving Forge Power priority over the Turbines.

Court Disposition

Plaintiff entitled to declaratory relief; plaintiff's title to Turbines is superior; interests of defendants in Turbines vested in plaintiff immediately before appointment of administrators.

Orders

  • Plaintiff entitled to declarations as to vesting of interests under s 267(2) PPSA and superiority of title in Turbines
  • Parties to bring in Short Minutes; costs to be addressed if necessary