Mar 252015
 

The Final Report on the review of Australia’s Personal Property Securities Act (PPSA) was tabled before Parliament on 18 March 2015.  (It was written by Bruce Whittaker, Partner, Ashurst.)

PPSA-final-report-cover

Cover of report

Extracts from Executive Summary

…. The Personal Property Securities Act 2009 (referred to in this report as the Act) has improved consistency in Australia’s secured transactions laws, but submissions emphasised that the Act and the Register are far too complex and that their meaning is often unclear, and that the resultant uncertainty has not allowed the Act to reach its potential…. …. Much can be done to improve the Act. The Act is significantly longer than the corresponding legislation in other jurisdictions, and while some of that additional length is attributable to constitutional or other machinery provisions, much of it flows from the very prescriptive nature of some of the drafting, and from the inclusion of additional provisions that may be of only marginal benefit…. …. There is no one single step that by itself will produce a major improvement to the Act. Rather, improvement needs to come from the making of many small changes…. …. The reforms introduced by the Act will only realise their objectives if the people that it affects are aware of it, and understand how it affects them. Government went to considerable efforts to raise awareness of the Act around the time that the Act was passed, but general awareness of the Act appears to have remained low, and the complexity and unfamiliarity of the content of the Act have meant that many do not know how to work with it….

Recommendations

There are 394 recommendations in the Final Report.  They appear in a table  in Annexure E, beginning at page 502 of the report.  DOWNLOAD: The full report is available for download at this AG department website.

Non-compliance with the Act

As someone who believes that our laws must be drafted using plain writing skills, and as one of those who felt strongly and said from the start that the  Personal Properties Securities Act 2009 was far too complex and confusing for the vast majority of people to understand (and hence, badly written), the Report’s comments to this effect are worth repeating here.  They appear under the heading  “3.2.3  Causes of non-compliance with the Act”:

The lack of awareness and understanding of the Act among users is also the primary reason why businesses are failing to comply with it. A person who is not aware of the existence of the Act, or of the fact that it could apply to them, is most unlikely to be operating in a manner that is consistent with the rules set out in the Act, particularly as those rules are very different in some critical respects to the laws that preceded them. Similarly, even people who are aware of the Act and of the fact that it affects them are often failing to comply with its rules because they do not understand those rules properly. One submission from the rural sector observed, for example, that the Act:

has not achieved a clear and appropriate outcome for small business; rather it has created a raft of uncertainty, misrepresentation and total confusion for all small business operators in Rural Australia.

The extracts from submissions that are set out above in Section 3.1.2 all make the same point: that the Act and the Register are far too complex. This was a consistent theme across the submissions as a whole.

The Act deals with a complex area of the law – one that traverses our entire economy, and that manifests itself in different sectors of the economy in very many different ways. The area does not lend itself to one simple set of rules, and the Act will always be complex. The submissions demonstrated, however, that the Act is more complex than it needs to be. In my view, a number of factors have contributed to this outcome.

First, as noted earlier, many of the concepts and much of the terminology in the Act have been adopted from overseas models. Those models were not created in a legal vacuum, but were founded in and based on the substance of the legal systems for which they were developed. In particular, while Article 9 of the Uniform Commercial Code in the United States was regarded as revolutionary in the way that it created a standard set of rules for all types of security interests, it was also very much a creature of the state of law and commercial practice in the United States at the time it was developed. Clearly, the economic structures and legal systems in Australia in the early 21st century are very different to those that prevailed in the United States in the middle of the previous century. As a result, terminology and concepts that made sense and were relevant for Article 9 as part of United States law will not necessarily make the same sense, or have the same relevance, in the Act as a component of current Australian law.

Secondly, it appears that the architects of the Act may have tried too hard to be helpful. The Act is far longer than its Canadian and New Zealand counterparts, even allowing for the additional provisions that were included to accommodate constitutional and other machinery requirements. The developers of the Act appear to have endeavoured to produce a “best of breed” piece of personal property securities legislation, by picking out the best elements of the offshore models and then adding additional detail in an effort to explain more clearly exactly what is required. Rather than helping Australian businesses, however, this had the effect of creating very specific and detailed operational requirements. It limited flexibility and required changes to operating practices in order to align them with the structures required by the new rules.

The third main factor that has led to this situation, in my view, is that the development of the Act appears to have been approached as a design process, too divorced from the realities of the marketplace that it was designed for. While Government did provide the business and legal community with opportunities to comment on drafts of the legislation, the sense of many of those who were involved in the consultation process was that input from the business and legal community was not sufficiently incorporated into the policy design and the detailed drafting. As a result, there is a misalignment in some areas between the policy and drafting of the Act on the one hand, and the operating realities of the Australian business environment on the other. This has created confusion and uncertainty, rather than clarity and certainty.

This is not intended to reflect adversely on the individuals involved in the actual drafting of the Act, or those who instructed them. Rather, it is a reflection of the magnitude and complexity of the task.

Whatever the reasons for the confusions and complexities in the Act, they have made the Act very hard to understand and to work with, not just for businesses but even for legal specialists as well. This is exacerbated by the fact that the complexities compound each other – unfamiliar terms and uncertain concepts are used in complex provisions, in a way that can make it even more difficult to determine how those complex provisions inter-relate with each other. The cumulative effect is that the Act can be very difficult to understand and to work with.

It is clear that much can and should be done to streamline the Act, and to align it more closely with the realities of the marketplace that it applies to. That is the subject of Chapters 4 to 9 of this report.

The big challenge for amendments to the Act that are made as a result of the Final Report is that they make the Act and its practical application much easier to understand.

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Apr 262012
 

Complied by Michael Ennis.  Michael developed an interest in insolvency case law, while a Deputy Registrar in Bankruptcy at the Federal Court of Australia and while undertaking various roles at the  Insolvency Trustee Service Australia (ITSA).  He has maintained this interest since retiring.  If you would like to receive the Insolvency Decisions schedule direct, advise Michael of additional decisions, or share your observations, you may contact  Michael direct on rmci53mje@spin.net.au.

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Bankruptcy Act – Prior to Date of Bankruptcy

I like to see matters such as this where the Constitution is considered – Capital Finance Australia Ltd v Vellar [2012] FMCA 285 (4 April 2012) BANKRUPTCY – Creditors petition – opposition challenging authority of Federal Magistrate – High Court summons filed on eve of hearing – adjournment applications refused – sequestration order made.

CONSTITUTIONAL LAW – Creation of Federal Magistrates Court – appointment of Federal Magistrates – whether invalid under Chapter III of the Constitution by reason of exclusion from judges’ pensions http://www.austlii.edu.au/au/cases/cth/FMCA/2012/285.html

‘Stay Orders’ seem to go in & out of favour – a good summary of where the Court has gone in relation to the definition of insolvency in recent times – I’m not sure that I understand the basis for the change. Could it be that given that there is much more ready access to credit now, as opposed to a generation ago, the debtor is demonstrating reluctance to pay rather than insolvency?? – National Australia Bank Limited v Oberg [2012] FMCA 233 (27 March 2012) BANKRUPTCY – Creditor’s petition – whether debtor satisfied court that he is able to pay his debts within s.52(2)(a) of the Bankruptcy Act 1966. http://www.austlii.edu.au/au/cases/cth/FMCA/2012/233.html

It will be interesting to see if there is more Court action in this matter – Zekry v Nair [2012] FMCA 237 (19 March 2012) BANKRUPTCY – Application to set aside bankruptcy notice – controlling trustee appointed – applicant failed to appear

 http://www.austlii.edu.au/au/cases/cth/FMCA/2012/237.html

No surprises – Deputy Commissioner Of Taxation v Caporale [2012] FMCA 206 (16 March 2012) BANKRUPTCY – Contested creditor’s petition – unpaid tax – taxpayer objecting to assessments – second such objection – no reason to delay making a sequestration order http://www.austlii.edu.au/au/cases/cth/FMCA/2012/206.html

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Bankruptcy Act – following Date of Bankruptcy

Romeo v The Trust Company (PTAL) Ltd [2012] NSWCA 62 (30 March 2012) APPEAL – application for leave to appeal – default judgment for possession of property set aside on condition that mortgagors pay part of claimed debt into court – whether condition should have been imposed – effect of bankruptcy of one mortgagor http://www.austlii.edu.au/au/cases/nsw/NSWCA/2012/62.html

A Bankruptcy & a Part X!! – The Trustee of the Property of Paul Jason Uhrhane, A Bankrupt & Anor v Gunn & Anor [2012] QCA 75 (30 March 2012) PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADING – DEFENCE AND COUNTERCLAIM – where the appellants made an admission in their original defence that a registered mortgage was granted in favour of the respondents – where the appellants subsequently filed an amended defence that challenged the validity of that mortgage – where the primary judge struck-out the amended defence for inconsistency with the admission in the original defence – whether the appellants’ original defence contained an admission that was inconsistent with their amended defence – whether the primary judge was correct in striking-out the amended defence http://www.austlii.edu.au/au/cases/qld/QCA/2012/75.html

** follows Setting Aside of Sequestration Order ** –  Mbuzi v SV Partners & Anor [2012] QSC 84 (5 April 2012) PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – ORIGINATING PROCESS – where the applicant started proceeding by originating application – where the applicant claims compensatory damages for negligence, undue harassment and defamation and aggravated and vindicatory damages – where the applicant sought an order under r 14 of the Uniform Civil Procedure Rules 1999 (Qld) that the proceeding continue as if started by claim – where claims for damages could proceed only if properly pleaded and particularised – where purpose of return date of application was to address the applicant’s choice of originating process – where the amounts claimed for damages did not require the claim to be started in the Supreme Court – whether the choice of incorrect originating process was an abuse of the court’s processes

http://www.austlii.edu.au/au/cases/qld/QSC/2012/84.html  

Should Trustees start reading the transcript of Sequestration Order hearings ? Mbuzi v Favell (No 2) [2012] FCA 311 (28 March 2012) BANKRUPTCY AND INSOLVENCY – appeal against sequestration order made by Federal Magistrate – service of bankruptcy notice – reg 16.01 Bankruptcy Regulations 1996 (Cth) – bankruptcy notice alleged to have been sent by post – evidence given of standard office practice for sending mail – claimed register of outgoing mail – claim that secretary/receptionist put bankruptcy notice in post – no evidence given by any person who may have put bankruptcy notice in post – system of postage – sequestration order of utmost seriousness – strict proof of service of bankruptcy notice required – onus of establishing proof of service of bankruptcy notice lies with creditor – appeal allowed COSTS – unrepresented litigant – self-represented litigant – appeal successful but no costs awarded http://www.austlii.edu.au/au/cases/cth/FCA/2012/311.html

Frost v Sheahan as Trustee of the Bankrupt Estate of Allen Gordon Frost [2012] FCAFC 46 (28 March 2012) BANKRUPTCY – whether property held on trust – findings of fact – impermissible attempt to re-canvass evidence on appeal – no appellable error – a mortgage – whether a transfer of property PRACTICE AND PROCEDURE – leave to amend Notice of Appeal – overturning factual conclusions on appeal – denial of procedural fairness

http://www.austlii.edu.au/au/cases/cth/FCAFC/2012/46.html

Part IV Compositions are so uncommon, but an application to have one set aside!! – Hingston v Westpac Banking Corporation [2012] FCAFC 41 (23 March 2012) BANKRUPTCY AND INSOLVENCY – consideration of an appeal by the bankrupt to set aside orders of the primary judge setting aside a composition made between the bankrupt and his creditors under Division 6 of Part IV of the Bankruptcy Act 1966 (Cth) – consideration of the grounds set out in s 222(1)(d) and s 222(5)(e)(i) of the Bankruptcy Act in setting aside the composition made by the bankrupt with his creditors under Division 6 of Part IV – consideration of the construction to be attributed to s 222(5)(e)(i) and s 76B in applying the grounds contained in that subsection to a composition under Division 6 of Part IV – consideration of the construction to be attributed to s 222(5)(e)(i) and s 76B in circumstances where the omission of a material matter from the debtor’s statement of affairs concerns a statement of affairs presented to the Official Receiver under s 55 of the Act rather than a debtor’s statement of affairs for the purposes of s 188(2C) or (2D) of the Bankruptcy Act – consideration of the factors informing the exercise of the discretion to set aside a composition made between the bankrupt and his creditors under Division 6 of Part IV in the context of s 222(1)(d) and s 222(5)(e)(i) as applied to a composition by s 76B of the Bankruptcy Act BANKRUPTCY AND INSOLVENCY – consideration of the scope of consequential orders to be made consequent upon setting aside a composition under s 222(1)(d) and s 222(5)(e)(i) and s 30(1) of the Bankruptcy Act 1966 (Cth) – consideration of the relationship between s 74(5) of the Bankruptcy Act and the power of the Court to make remedial orders that put the parties in their pre-composition position

http://www.austlii.edu.au/au/cases/cth/FCAFC/2012/41.html

Samootin v Official Trustee in Bankruptcy (No. 2) [2012] FCA 316 (28 March 2012) PRIVILEGE – Legal professional privilege – waiver – common interest – documents coming into existence after sequestration order made and challenged – litigation involving Official Trustee in Bankruptcy and bankrupt – interests of Official Trustee potentially in conflict with interests of bankrupt http://www.austlii.edu.au/au/cases/cth/FCA/2012/316.html

Ambrose v Poumako [2012] FCA 318 (22 March 2012)

http://www.austlii.edu.au/au/cases/cth/FCA/2012/318.html

Owners Corporation PS334337A v Hoiles [2012] FMCA 218 (19 March 2012) BANKRUPTCY – Application of trustees under s.146 of the Bankruptcy Act 1966 (Cth) for distribution of dividends – no statement of affairs received in relation to deceased’s estate – application acceded to – costs charges and expenses incurred by applicants including in period between initial bankruptcy and subsequent bankruptcy of a deceased estate be paid in priority by bankrupt deceased estate http://www.austlii.edu.au/au/cases/cth/FMCA/2012/218.html

Hansen Yuncken Pty Ltd v Ian James Ericson trading as Flea’s Concreting & Anor [2012] QSC 51 (14 March 2012) TAXES AND DUTIES – ADMINISTRATION OF FEDERAL TAX LEGISLATION – COLLECTION AND RECOVERY OF TAX – COLLECTION OF AMOUNT FROM THIRD PARTY – Taxation Administration Act 1953 (Cth), Schedule 1 s260-5 – notices – statutory charge created by – where moneys paid into court by recipient of notice – where debt owing be recipient to taxpayer discharged by that payment – whether Commissioner of Taxation entitled to a charge over money in court

http://www.austlii.edu.au/au/cases/qld/QSC/2012/51.html

Must have missed this one earlier, worth a good look – Burness v Taliauli [2011] FMCA 910 (10 November 2011) BANKRUPTCY – Application for vacant possession of property – failure to annul bankruptcy – application successful http://www.austlii.edu.au/au/cases/cth/FMCA/2011/910.html

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Bankruptcy Act – Other Schemes under the Act

Moran v Robertson [2012] FCA 371 (13 April 2012) BANKRUPTCY – application to have personal insolvency agreements set aside – terms of agreement unreasonable – derisory dividend payable to creditors – some creditors electing not to participate in distribution GUARANTEES construed strictly in favour of guarantor PRACTICE AND PROCEDURE – filing of written submissions after hearing – submissions manifestly in excess of that contemplated TRUSTS – personal liability of trustee http://www.austlii.edu.au/au/cases/cth/FCA/2012/371.html

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Corporations – pre-appointment

Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Limited [2012] FCA 363 (16 April 2012) CORPORATIONS – application to wind up company in insolvency by reason of tax debt – tax debt the subject of pending review proceedings in the Administrative Appeals Tribunal – application to adjourn winding up application until decision in review proceedings CORPORATIONS – extension of period within which application for company to be wound up in insolvency be determined – “special circumstances” under s 459R(2) of the Corporations Act 2001 (Cth) TAXATIONapplication to wind up company – tax debt the subject of pending review proceedings in the Administrative Appeals Tribunal – adjournment PRACTICE AND PROCEDURE – corporate respondent – leave to appear otherwise than by a lawyer – dispensing with r 4.01(2) of the Federal Court Rules 2011 EVIDENCE – “fullest and best” evidence principle – standard of proof – balance of probabilities http://www.austlii.edu.au/au/cases/cth/FCA/2012/363.html

Hillam v Ample Source International Ltd (includes Corrigendum dated 18 April 2012) [2012] FCA 374 (13 April 2012) PRACTICE AND PROCEDURE – winding up order on the ground of oppression previously stayed on conditions pending appeal – preservation of status quo – interlocutory application for the reconstitution of the board of the company and for the sale of a substantial asset of the company pending appeal

http://www.austlii.edu.au/au/cases/cth/FCA/2012/374.html

Lifese Pty Limited v Lee Crane Hire Pty Limited [2012] FCA 302 (28 March 2012) CORPORATIONS – statutory demand for payment of debt – application to set aside – whether “genuine dispute” – whether abuse of process Held: statutory demand be set aside

http://www.austlii.edu.au/au/cases/cth/FCA/2012/302.html

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Corporations – post appointment

MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 383 (16 April 2012) CORPORATIONS – freezing orders – appointment of an external administrator – s 440D of the Corporations Act 2001 (Cth) – proceeding – in relation to – any of its property – legal or equitable estate or interest – a thing in action – chose in action – bare right to litigate – third parties – Mareva type order – undertaking – discretionary considerations – dissipation or disposal of assets – Div 7.4 of the Federal Court Rules 2011 (Cth) – good arguable case – inference – danger or real risk http://www.austlii.edu.au/au/cases/cth/FCA/2012/383.html

An interesting matter – also related to a Bankruptcy – Healy, in the matter of Falaren Pty Ltd (deregistered), v Australian Securities and Investments Commission [2012] FCA 368 (12 April 2012) CORPORATIONS – whether a deregistered company should be reinstated – whether the deregistration of a company should be deferred – whether proposed liquidator is qualified to be appointed as a replacement liquidator http://www.austlii.edu.au/au/cases/cth/FCA/2012/368.html

Australian Property Custodian Holdings Ltd v Capital Finance Australia Ltd & Ors [2012] VSC 124 (4 April 2012) CORPORATIONS – Whether future chose in action secured under charges – Construction of charges – Whether bare right to sue – Genuine commercial interest – Right incidental or ancillary to transfer of interest in property – Whether liquidators may prosecute chose in action when charges enforced and receivers appointed – Whether trustee charged its right of indemnity including right of exoneration – Application by liquidators for approval of litigation funding agreement – Director of proposed funder defendant in other proceedings brought by the liquidators – Corporations Act 2001 (Cth) s 477(2B)http://www.austlii.edu.au/au/cases/vic/VSC/2012/124.html

It sounds like this will be an interesting matter to follow this matter –  AGBC Pty Ltd & Anor v Dessa & Ors [2012] VSC 118 (30 March 2012) CORPORATIONS – Application for interim injunction pursuant to Section 1324(4) of the Corporations Act 2001 (Cth).

http://www.austlii.edu.au/au/cases/vic/VSC/2012/118.html

Grapecorp Management Pty Ltd (in liq) v Grape Exchange Management Euston Pty Ltd [2012] VSC 112 (30 March 2012) CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Meaning “mutual credits, debts or other mutual dealings” – To be construed widely. CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Whether funds were trust funds thereby precluding mutuality and set-off. CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Whether post liquidation expenses can be set-off against post liquidation income – Relevance of antecedent agreement – Meaning of contingent or vested claims. CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Whether notice of insolvency precludes set-off under s 553C(2) – Relevant time that creditor must have such notice. CORPORATIONS LAW – Insolvent companies – Whether costs and expenses were properly incurred and are priority claims under s 556(1)(a) Corporations Act. AMENDMENT AND LEAVE TO RE-OPEN CASE – Whether late amendment should be permitted – No prejudice to plaintiff – Matter raised early in proceeding – Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 applied

http://www.austlii.edu.au/au/cases/vic/VSC/2012/112.html

Georges v Seaborn International Pty Ltd (Trustee) [2012] FCA 294 (26 March 2012) APPEAL – Application for leave to appeal – whether order for directions was final or interlocutory – application for leave to appeal by non party – refusal of application to be appointed as a representative in the proceedings http://www.austlii.edu.au/au/cases/cth/FCA/2012/294.html

Sheahan; In the matter of SK Foods Pty Ltd (In Liquidation) [2012] FCA 268 (23 March 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/268.html

Gould Bros & Co Pty Limited (Administrators Appointed), in the matter of Gould Bros & Co Pty Limited (Administrators Appointed) [2012] FCA 285 (22 March 2012) CORPORATIONS – administration – application as to how Pt 5.3A of the Corporations Act 2001 (Cth) is to operate – administrators’ liability and indemnity for debts of administration – funding agreement http://www.austlii.edu.au/au/cases/cth/FCA/2012/285.html

STARRS -v- RETRAVISION (WA) LTD [2012] WASCA 67 (27 March 2012) Practice and procedure – Application to set aside default judgment – Merits of proposed defence – Turns on own facts http://www.austlii.edu.au/au/cases/wa/WASCA/2012/67.html

Metro Chatswood Pty Ltd v CRI Chatswood Pty Ltd (In Liquidation) (Receivers and Managers Appointed) & Ors [2012] NSWCA 49 (22 March 2012) APPEAL – interlocutory injunction pending appeal – balance of convenience – no question of principle

http://www.austlii.edu.au/au/cases/nsw/NSWCA/2012/49.html

C Pty Limited and Ors & PGW as Liquidator of S Pty Limited (in Liq) (Costs) [2012] FamCAFC 38 (15 March 2012) FAMILY LAW – APPEAL – COSTS – where the appellants seek that each party bear their own costs or in the alternative that they be granted a certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) – where the respondent seeks costs on “the ordinary basis” – where costs certificates cannot be granted pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) given the appeals have been dismissed – where the appellants object to the Full Court receiving the respondent’s submissions in reply which they assert were filed out of time – where the submissions in reply were received – where both sets of proceedings before the Family Court were proceedings under the Family Law Act 1975 (Cth) (“the Act”) and thus the applications are governed by s 117 of the Act – where the appeals have been wholly unsuccessful – where there is no evidence as to the financial circumstances of the parties which either supports or prevents an order for costs being made – where there is no basis for making an order for costs based on the conduct of the respondent – where there is relevant conduct by the appellants to be taken into account in favour of an order for costs being made – where the offers of settlement made by the appellants are disregarded – where the applicants are to pay the respondent’s costs of and incidental to the appeals as agreed and in default of agreement as assessed on a party/party basis – costs order made http://www.austlii.edu.au/au/cases/cth/FamCAFC/2012/38.html

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Miscellaneous

Income for Income Tax purposes – what about if a Bankrupt? – Sent apears to be an interesting fellow – Sent v Commissioner of Taxation [2012] FCA 382 (16 April 2012) INCOME TAX – Employee incentive share trust plan — Whether payment to trust had character of ordinary income – Whether payment in substitution for bonuses from employment is ordinary income – Whether when part of amount deemed to be ordinary income assessable to the respondent but the remaining part is not — Whether respondent obtained a benefit or gain — Whether amount of ordinary income “derived” – When amount is applied or dealt with by a taxpayer – Whether exemptions applied to treat amount as a fringe benefit – PENALTIES and OFFENCES — Recklessness – Failure by taxpayer to discharge onus regarding recklessness of tax agent – Failure to adopt a reasonably arguable position ADMINISTRATIVE LAW — Whether error of law by the Administrative Appeals Tribunal —– Statutory requirement to provide reasons – Whether inadequacy of reasons an error of law – Whether appropriate to set aside decision for failure to provide adequate reasons – Whether facts as found are capable of supporting the decision http://www.austlii.edu.au/au/cases/cth/FCA/2012/382.html

NORTHWEST CAPITAL MANAGEMENT -v- WESTATE CAPITAL LTD [2012] WASC 121 (5 April 2012) Corporations – General meeting – Validity of purported resolutions – Whether chairperson appointed – Requirement of chairperson for validity of general meeting – Whether meeting in such disarray that no valid resolutions passed – Whether proxy votes invalidly excluded – s 1322 Corporations Act – Whether irregularities substantive or procedural Corporations – Whether proxy appointment ineffective under s 250B of the Corporations Act if it is provided to a third party for delivery to the company – Whether proxies tabled prior to general meeting Trade practices – Conduct likely to mislead or deceive – Misleading or deceptive conduct in relation to voting process for purported resolutions and circulating resolution – Whether s 18 The Australian Consumer Law (sch 2 of the Competition and Consumer Act 2010 (Cth) applies – Whether s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) applies – Meaning of ‘engage in conduct’ – Relevance of lack of evidence that any person was misled or deceived – Nature of injunctive relief under s 232 of The Australian Consumer Law and s 12GD of the Australian Securities and Investments Commission Act Trusts and trustees – Written circulating resolution – Whether power in Trust Deed for the removal of trustee by a circulating resolution – Nature of requirement for notice of meetings – Whether the same principle extends to requiring circulating resolutions to be provided to all unit holders Trusts and trustees – Whether implied term arises from a clause providing for removal of trustee for a power to appoint a new trustee – Powers under the Trustees Act 1962 (WA) to appoint a new trustee – History of powers to remove trustees and appoint new trustees – Trusts and trustees – Trustees Act 1962 (WA) s 77(1) – Whether expedient to appoint a new trustee – Whether issue of units in Trust and stapled shares in company occurred for purpose of procuring voting support – Whether it is inexpedient, difficult or impracticable to appoint a new trustee in substitution for an existing trustee without the assistance of the Court – Considerations in exercise of discretion under s 77(1) – Rule against direction of trustee – Whether meeting of unit holders should be convened by Trustee – Powers of unit holders http://www.austlii.edu.au/au/cases/wa/WASC/2012/121.html

Barescape Pty Ltd & Anor v Bacchus Holdings Pty Ltd & Anor (No 6) [2012] NSWSC 257 (21 March 2012) EVIDENCE – Expert evidence – Expert’s reports – Rules of court as to admissibility of expert’s reports – Rule 31.28 of Uniform Civil Procedure Rules 2005 (NSW) – Whether “exceptional circumstances” exist supporting the admissibility of expert’s reports – Whether substantial prejudice exists preventing the admission of expert’s reports.EVIDENCE – Tender of MYOB records – Whether sufficient evidence exists to establish how MYOB records were prepared – Whether business records under s 69 of Evidence Act 1995 (NSW).

PERSONAL PROPERTY SECURITY LEGISLATION

As the PPSA is about to take effect, I thought I’d have a look at what is happening in NZ  – surprise, surprise the 1st three decisions feature corporate insolvency practitioners!!  – Does anyone know of a Canadian equivalent to AUSLII?Commissioner of Inland Revenue v Stiassny [2012] NZCA 93 (15 March 2012) Were the receivers personally liable to pay the GST? Can any of the respondents recover the GST from the Commissioner on the basis it was paid under a mistake of law, namely that the receivers were personally liable to pay the GST?

http://www.nzlii.org/cgi-bin/sinodisp/nz/cases/NZCA/2012/93.html?query=”personal%20property%20securities%20

Marac Finance Limited v Greer [2012] NZCA 45 (1 March 2012) A question of priorities – if the PPSA does not apply

 http://www.nzlii.org/cgi-bin/sinodisp/nz/cases/NZCA/2012/45.html?query=”personal%20property%20securities%20

Glenmorgan Farm Limited (in rec and in liq) v New Zealand Bloodstock Leasing Limited [2011] NZCA 672 (20 December 2011)

http://www.nzlii.org/cgi-bin/sinodisp/nz/cases/NZCA/2011/672.html?query=”personal%20property%20securities%20

Stop looking!  I’ve found a Canadian source – note Price Waterhouse as Receiver and Receiver/Manager in this decision – AGT Financial Corporation v. Ellake Services Limited, 2011 BCSC 578 ‘The standard described in Re Searcy does not require an individual to have conscious knowledge. Rather, it requires that the relevant information be delivered to a corporation in a manner such that a reasonable person would take cognizance of it. The court’s concern in Re Searcy, leading to its discussion of “actual knowledge”, was that the basis for the knowledge did not require the corporation to draw inferences (however reasonable) in order to arrive at the requisite conclusion’

LINK

And now a Bankrupt Estate – Bankruptcies of Arseneau and Arseneau, 2005 NSSC 26 

LINK

An older Canadian case, but useful in terms of what you might need to consider in conducting a search of the PPSR (Aust) – of interest to me because of the eccentricities of the Bankruptcy database Harry Watson Farm Supply Ltd. v. Hi-Way Service Inc., 2000 ABQB 26 There can be little doubt that a farm tractor is equipment and serial numbered goods as defined by the Act and by Personal Property Security Regulation Alt. Reg. 234/90 (see Regulations l(j);1(1); 1(s);1(t); and Section 1 (1)0 of the Act)

LINK

END

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Jul 012011
 

The Personal Properties Securities (PPS) Register in Australia is scheduled to open for business on 31 October 2011.  The PPS Register will be an electronic data file stored on government computers and accessible via the internet.  (Access and usage conditions and fees will apply.)

Aust Gov PPSR logo

A personal property security exists when a company, individual or other entity takes an interest in personal property as security for a loan or other obligation, or enters into a transaction that involves the supply of secured finance.   This can include individuals or companies who are involved in: taking fixed and floating charges; long term and finance leases; chattel mortgages; retention of title arrangements; commercial consignments, and factoring. 

Personal property is any form of property other than land, buildings or fixtures which form a part of that land.  It can include tangibles such as cars, art, machinery and crops; as well as intangibles such as intellectual property and contract rights.  (In PPS parlance an item of personal property that is pledged by its owner as security for repayment of a liability is sometimes called “collateral”.)

The individual or other entity who has an interest in personal property as security is referred to as a secured party.  A secured party may enter certain identifying information about the personal property on the PPS Register.  Through entering this information on the PPS Register, the secured party records and gives notice for all to see that it has a legal right, entitlement, interest or power in relation to the property. 

Where there are multiple, competing or conflicting claims over personal property, the default and specific priority rules set out in the PPS Act come into play.  These are complex.  But in many cases the timing of the registration on the PPS Register will affect the order of priority, or ranking, of a claim.

Many of the existing registers maintained by state and territory governments and the Australian Government will be closed.  These include ASIC’s Register of Company Charges, motor vehicle securities and bills of sale registers.  The interests of secured parties recorded in such registers will be moved automatically across to the PPS Register, without the secured party having to do anything.

A secured party’s rights under existing fixed and floating charges will be maintained under the PPS system. A number of existing concepts will be replaced.  For example, the concept of fixed and floating charges will be replaced by new concepts of security interests known as non-circulating and circulating assets respectively.

There is no need to register existing security interests immediately after the PPS Register opens. The PPS Act provides a 24 month transitional period to register existing security interests.  However, these transitional security interests will need to be registered on the PPS Register within the transitional period to avoid losing priority after the end of the transitional period.

The enforcement provision of  the PPS Act only applies to security interests provided by security agreements made at the time or after the PPS Register opens.  For transitional security interests the enforcement rules that applied at the time of entering into the security agreement would apply as if the Act had not been enacted.

To go to the Government’s PPS information website, click HERE

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Disclaimer: This document provides general information about the operation of the PPS system and does not constitute legal advice. You should seek legal or other professional advice to consider the application of PPS to your individual circumstances.

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