Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2017] FCA 866

Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2017] FCA 866

The purported special resolution to wind up the respondent was not validly passed due to failure to give proper notice to all shareholders and not meeting the statutory requirement for shortened notice, with Sevenoaks remaining a shareholder as at the meeting date. Without a valid winding up resolution, s 588FL of the Corporations Act did not operate to vest the security interest in the respondent company. As perfection by possession under s 21(2)(b) of the PPS Act requires possession other than by seizure or repossession, and the receivers' steps to obtain possession constituted seizure after default, the appointment did not perfect the security interest by possession. However, given the...

Parties
Applicant: Knauf Plasterboard Pty Ltd; Respondent: Plasterboard West Pty Ltd (In Liquidation) (Receivers and Managers Appointed)
Jurisdiction
Australia
Judgment Date
01 August 2017
Procedural Posture
Application for Declarations—corporations Matter / Judgment Following Final Hearing
Outcome
Declarations not finally granted; parties invited to provide draft orders and submissions as to costs. The court found that s 588FL did not apply so the security interest had not vested in the respondent, but did not determine all declarations sought. Costs reserved; directions made for written submissions.
Legal Topics
Validity of Security Interests, Winding Up Procedure, Perfection of Security Interest Under PPSA, Share Buy Back Procedures, Vesting of Security Interests Upon Liquidation
Corporations Law Commercial Law Insolvency Law Validity of Security Interests Winding Up Procedure Perfection of Security Interest Under PPSA Share Buy Back Procedures Vesting of Security Interests Upon Liquidation

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Parties

Knauf Plasterboard Pty Ltd

Applicant

Plasterboard West Pty Ltd (In Liquidation) (Receivers and Managers Appointed)

Respondent

Procedural Posture

Application for Declarations—corporations Matter / Judgment Following Final Hearing

Legal Issues

  1. 1 Whether a valid resolution to wind up the respondent was passed
  2. 2 Whether the applicant's security interest vested in the respondent under s 588FL of the Corporations Act 2001 (Cth) or s 267 of the Personal Property Securities Act 2009 (Cth)
  3. 3 Whether the appointment of receivers and managers was sufficient to perfect the security interest by possession under s 21(2)(b) of the PPS Act

Ratio Decidendi

The purported special resolution to wind up the respondent was not validly passed due to failure to give proper notice to all shareholders and not meeting the statutory requirement for shortened notice, with Sevenoaks remaining a shareholder as at the meeting date. Without a valid winding up resolution, s 588FL of the Corporations Act did not operate to vest the security interest in the respondent company. As perfection by possession under s 21(2)(b) of the PPS Act requires possession other than by seizure or repossession, and the receivers' steps to obtain possession constituted seizure after default, the appointment did not perfect the security interest by possession. However, given the...

Court Disposition

Declarations not finally granted; parties invited to provide draft orders and submissions as to costs. The court found that s 588FL did not apply so the security interest had not vested in the respondent, but did not determine all declarations sought. Costs reserved; directions made for written submissions.

Orders

  • On or before 8 August 2017, parties to provide draft minutes of order to give effect to reasons.
  • On or before 15 August 2017, parties to file and serve written submissions (maximum 5 pages) concerning costs.