The Federal Court in the recent decision of Carson, in the matter of Hastie Group Limited (No. 3) gave a timely reminder to landlords that merely registering a security interest on the Personal Property Securities Register (PPSR) may not be enough to adequately protect the interests of a landlord.
Whilst the case was not specifically concerned with land leases but leases of plant and equipment, the warning which emanates from the decision needs to be carefully noted by landlords.
In the matter, administrators appointed to the company (the subject of the secured interests) requested information from the charge holders to enable the administrators to adequately identify the plant and equipment subject to the charges. The administrators were seeking to sell plant and equipment to raise funds and it was difficult to determine what plant and equipment each of the security interests related to because many of the registrations used general wording and many other transitional interests had not been registered.
A number of charge holders failed to adequately respond and the administrators applied to the Federal Court for directions to allow them to dispose of the plant and equipment.
The Court held that the administrators were justified in treating the unclaimed plant and equipment as property of the company and selling the plant and equipment subject to a procedure being imposed.
Points to note:
- PPSR registrations should adequately identify the property being secured.
- Landlords need to ensure they adequately deal with queries from relevant parties seeking additional information about registrations recorded on the PPSR and transitional security interests.
Please contact us if you have any queries in relation to the PPSR and leases.