FEDERAL COURT OF AUSTRALIA

Squadron Resources Pty Ltd v Highlake Resources Pty Ltd, in the matter of Highlake Resources Pty Ltd [2018] FCA 1292

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to section 588FM of the Corporations Act 2001 (Cth), 26 June 2018 be fixed as the later time for the purpose of subparagraph 588FL(2)(b)(iv), in respect of any security interests granted by the Defendant in favour of the Plaintiff registrable under the Personal Property Securities Act 2009 (Cth) in connection with the general security deed between the Plaintiff and the Defendants dated on or about 22 June 2016, for the registrations with registration numbers listed in “Annexure A” to these orders.

2.    There be no order for costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER J:

1    These are the reasons for the orders made on 31 July 2018.

2    Squadron Resources Pty Ltd (ACN 604 832 751) applies under s 588FM(1) of the Corporations Act 2001 (Cth) to extend time for Squadron Resources (formerly known as Minderoo Resources Pty Ltd) to perfect a security interest granted to it by each of the first defendant (Highlake Resources Pty Ltd (ACN 062 487 585)), the second defendant (Matrix Gold Pty Ltd (ACN 116 500 308)) and the third defendant (Maldon Resources Pty Ltd (ACN 090 458 665)) (jointly, the defendants) by registration of financing statements on the Personal Property Securities Register (PPSR) (the application).

3    By the time of the final hearing on 31 July 2018, each of the defendants consented to the orders sought in the application. No secured creditors or the Australian Securities and Investments Commission (ASIC), each of which was served with the application and provided with notice of the hearing date, have objected to the application, nor are the defendants aware of any creditor likely to be prejudiced by the orders sought.

THE EVIDENCE

4    Three affidavits were filed in support of the application:

    the affidavit of Mr John Hartman, sworn 16 July 2018 (Hartman Affidavit);

    the affidavit of Ms Rebecca Hanrahan, sworn 30 July 2018 (Hanrahan Affidavit); and

    the affidavit of Ms Natasha Graham, sworn 31 July 2018 (Graham Affidavit).

BACKGROUND

5    Mr Hartman, director of Squadron Resources, deposed to much of the background to the application. Relevantly, the Harman Affidavit records that in his role as director, Mr Hartman instructs external lawyers to register security interests over personal property by registering financing statements on the PPSR.

6    In his capacity as a director of Squadron Resources, Mr Hartman became aware of a transaction involving Centennial Mining Limited (ACN 149 308 921) (formerly known as A1 Consolidated Gold Limited) (HeadCo) and its subsidiaries, the defendants, which occurred in mid-2015 (the Transaction), prior to him becoming director.

7    From Mr Hartman’s review of the materials related to the Transaction, it appeared that the employees of Squadron Resources who had the carriage of the Transaction had since left Squadron Resources employ.

Convertible Note Agreement and security agreements

8    From his review of Squadron Resources’ books and records, Mr Hartman became aware that HeadCo and Squadron Resources had entered into a convertible note agreement dated 12 May 2015, which was supplemented by a Supplementary Agreement made 12 May 2015 (collectively, the Convertible Note Agreement).

9    The Convertible Note Agreement was amended by:

(a)    the Convertible Note Agreement Deed of Amendment, made 28 June 2018, by which certain consideration was provided by Squadron Resources in favour of HeadCo and the defendants;

(b)    the Convertible Note Agreement Second Deed of Amendment, made 4 July 2018; and

(c)    the Convertible Note Agreement Third Deed of Amendment, made 11 July 2018.

10    The monies payable under the Convertible Note Agreement are secured by:

(a)    the General Security Deed and Mining Mortgage provided by HeadCo in favour of Squadron Resources, as security trustee dated 25 June 2015 (HeadCo GSD); and

(b)    the Maldon Security Deed and Mining Mortgage which is described in the Convertible Note Agreement as a security deed and mining mortgage between HeadCo, the third defendant, the first defendant and Squadron Resources (as security trustee) on substantially the same terms as the HeadCo GSD of the Convertible Note Agreement (Subsidiary GSD). The executed Subsidiary GSD also includes the second defendant as a grantor.

11    The execution of the HeadCo GSD was a condition precedent to the Convertible Note Agreement and the issue of Notes thereunder.

12    From his review of the file, Mr Hartman is aware that:

(a)    the HeadCo GSD was registered on the PPSR on or about 25 June 2015 (registration number 201506250087762);

(b)    an interest was registered against mining licence MIN 5294 (of which HeadCo was licensee) in respect of the HeadCo GSD pursuant to s 71 of the Mineral Resources (Sustainable Development) Act 1990 (MRSDA) at 11.55am on 30 June 2015;

(c)    an interest was registered against mining licence MIN 5146 (of which the third defendant was licensee) in respect of the Subsidiary GSD pursuant to s 71 of the MRSDA at 3.59pm on 21 July 2016;

(d)    an interest was registered against mining licence MIN 5528 (of which the third defendant was licensee) in respect of the Subsidiary GSD pursuant to s 71 of the MRSDA at 4.06pm on 21 July 2016; and

(e)    an interest was registered against mining licence MIN 5465 (of which the first defendant was licensee) in respect of the Subsidiary GSD pursuant to s 71 of the MRSDA at 4.13pm on 21 July 2016.

The Subsidiary GSD

13    From a search of the PPSR carried out on behalf of Squadron Resources on 22 June 2018, Mr Hartman became aware that the Subsidiary GSD was not registered on the PPSR against the defendants.

14    Mr Hartman deposed to a series of communications between Squadron Resources, its former employees and its former solicitors occurring from 22 June to 13 July 2018. The facts deposed to suggest that due to a combination of the timing of the execution of the Subsidiary GSD in relation to the initial Convertible Note Agreement and miscommunication or misunderstanding between former employees of Squadron Resources and Squadron Resources’ former solicitors, the PPSR registrations were never effected.

Searches undertaken and inquiries made

15    Mr Hartman caused the files for the Transaction and the email inboxes of Squadron Resources’ former employees to be searched.

16    These emails and file searches revealed that:

(a)    on or about 10 June 2015, the lawyers representing the HeadCo and the defendants in the Transaction (HeadCo solicitors) had offered, and Squadron Resources agreed, to effect registrations;

(b)    on or about dated 23 June 2015, further emails were exchanged which confirmed that the registration on the PPSR would be left to Squadron Resources’ former solicitors, and the HeadCo solicitors would attend to the registration of the mining tenement mortgages;

(c)    Squadron Resources’ former solicitors caused the financing statement regarding the HeadCo Security Deed to be registered;

(d)    the Subsidiary GSD required further amendments in order to carve out a security interest held by the Australian and New Zealand Banking Group Limited (ANZ) and registered on the PPSR and migrated from the ASIC Register of Company Charges as charge number 1664031;

(e)    executed copies of the Subsidiary GSD were not provided to HeadCo until on or around May 2016; and

(f)    the Subsidiary GSD was not exchanged and dated until 22 June 2016.

17    Mr Hartman affirmed that it was unclear why no financing statements were registered on the PPSR against defendants in relation to the Subsidiary GSD in or about 22 June 2016.

18    Following his review of the documents, Mr Hartman deposed to believing that the failure to register was due to a miscommunication between Squadron Resources’ former employees and Squadron Resources’ former solicitors.

Correspondence with the defendants

19    On 16 July 2018, Mr Hartman caused a letter to be delivered by hand to each of the defendants at their respective registered offices.

Other security interests granted by the defendants

20    Mr Hartman was unaware of any other person who has a security interest granted by the first defendant or the second defendant, save for ANZ, which has PPSR registrations concerning term deposits made on 14 October 2016 in relation to the first and second defendants.

21    In relation to security interests granted by the third defendant, it is noted that:

(1)    Prior to the date of the Subsidiary GSD, the third defendant granted a security agreement over all present and after acquired property in favour of ANZ, which was migrated to the PPSR on 30 January 2012 (ANZ Charge). ANZ has registered an all present and after acquired property security interest on the PPSR, which was granted by the third defendant prior to the third defendant granting the Subsidiary GSD in favour of Squadron Resources, and, therefore, has priority over Squadron Resources’ security interest under the Subsidiary GSD.

(2)    The third defendant has granted further security interests since the date of the Subsidiary GSD to:

(a)    ANZ, which effected a registration on the PPSR in respect of a term deposit on 14 October 2016;

(b)    Elgas Limited, which effected a registration on the PPSR in respect of a purchase money security interest (PMSI) in relation to: ‘All goods now and in future supplied, bailed or otherwise made available by the secured party to grantor including but not limited to all gas, bulk gas facilities, exchange cylinders, equipment, consumables and rental cylinders’ on 1 April 2017;

(c)    Tru Flo Pumping Systems Pty Limited, the Trustee for the Jamb Family Trust, NDE Pty Ltd and QHG Pty Ltd, which effected the following registrations on the PPSR:

(i)    a PMSI in relation to: ‘All motor vehicles (as defined in the Personal Property Securities Act and Regulations) and their associated parts, accessories and equipment - rented, leased, hired, bailed, supplied on consignment, sold subject to a conditional sale agreement including retention of title, or otherwise made available to the grantor by the secured party’ on 14 October 2017;

(ii)    a PMSI in relation to: ‘All goods, equipment and/or other tangible property (including any accessions to those goods, equipment and/or property) sold, leased, hired, rented, bailed, supplied on consignment, sold subject to a conditional sale agreement including retention of title or otherwise made available by the secured party to the grantor’ on 14 October 2017;

(d)    Total Plant Hire Pty Ltd, which effected the following registrations on the PPSR:

(i)    a PMSI in relation to a particular motor vehicle with serial number JALFVZ34PG7000735 on 13 March 2018;

(ii)    a PMSI in respect of ‘All motor vehicles and their associated parts, accessories and equipment (accessions) rented, leased, bailed, hired, or otherwise supplied or made available to the grantor by the secured party on 13 March 2018;

(iii)    a PMSI in respect of ‘All goods, equipment and/or other tangible property (including any accessions to those goods, equipment and/or property) sold, leased, hired, rented, bailed or otherwise made available by the secured party to the grantor on 13 March 2018;

(e)    Boral Limited (and others) in relation to a PMSI in respect of ‘All goods, equipment and/or other tangible property (including any accessions to those goods, equipment and/or property), sold, leased, hired, rented, bailed, supplied on consignment, sold subject to a conditional sale agreement (including retention of title) or otherwise made available by the secured party to the grantor’ on 26 April 2018.

Outstanding amounts

22    Finally, Mr Hartman noted that the outstanding moneys owing under the Convertible Note Agreement, as he understands, are due on 10 August 2018 and total approximately $2,088,268.

THE APPLICATION

23    The application concerns:

(a)    a security interest taken over ‘all present and after-acquired property’ of the first defendant granted by it in favour of Squadron Resources registered on the PPSR on 26 June 2018 (PPSR R1);

(b)    a security interest taken over ‘all present and after-acquired property’ of the second defendant granted by it in favour of Squadron Resources registered on the PPSR on 26 June 2018 (PPSR R2); and

(c)    a security interest taken over ‘all present and after-acquired property’ of the third defendant granted by it in favour of Squadron Resources registered on the PPSR on 26 June 2018 (PPSR R3),

by way of the Subsidiary GSD.

24    The Subsidiary GSD secures the obligations under the Convertible Note Agreement between HeadCo and Squadron Resources.

25    Completion of the Convertible Note Agreement was subject to various conditions precedent, including shareholder approval, to allow HeadCo to meet the funding condition precedent of a share sale agreement with Octagonal Resources Ltd (the Octagonal Transaction). It was also subject to the execution of the HeadCo GSD, under which the Convertible Note Agreement was secured over ‘all present and after-acquired property’. This security interest was registered on the PPSR by Squadron Resources’ former solicitors on 25 June 2015.

26    By the HeadCo GSD, HeadCo also granted an interest in a mining lease, which was registered pursuant to the MRSDA on 30 June 2015. It appears that the parties agreed that the HeadCo solicitors would effect this registration, and it appears they did so.

27    The Subsidiary GSD was anticipated to be provided in the Convertible Note Agreement, however, it appears this was revised with the Subsidiary GSD to be provided at a later time and after the Octagonal Transaction had occurred. The Subsidiary GSD required further amendments in order to carve out the ANZ Charge and the executed Subsidiary GSD was not exchanged until 22 June 2016.

28    By the Subsidiary GSD, the first defendant and the third defendant were also granted interests in mining tenements held by them in favour of the Squadron Resources.

Failure in registering

29    The totality of the evidence suggests that the failure to register by Squadron Resources to register its interests was due to inadvertence or miscommunication between Squadron Resources’ former employees and Squadron Resources’ former solicitors.

30    On realising the failure to lodge a financing statement on the PPSR as against the defendants on 22 June 2018, PPSR R1, PPSR R2 and PPSR R3 were promptly effected.

31    As PPSR R1, PPSR R2 and PPSR R3 occurred outside of 20 business after the security agreement that gave rise to the security interests came into force, absent relief pursuant to s 588FM of the Corporations Act, Squadron Resources is exposed to a s 588FL(1) event in respect of the defendants from six months following 26 June 2018 instead of 22 June 2016.

32    For this reason, relief is sought by Squadron Resources pursuant to s 588FM in respect of PPSR R1, PPSR R2 and PPSR R3.

THE LEGISLATION AND APPLICABLE PRINCIPLES

33    Section 588FL relevantly provides that:

Scope

(1)    This section applies if:

(a)    any of the following events occurs:

(i)    an order is made, or a resolution is passed, for the winding up of a company;

(ii)    an administrator of a company is appointed under section 436A, 436B or 436C;

(iii)    a company executes a deed of company arrangement under Part 5.3A; and

(b)    a PPSA security interest granted by the company in collateral is covered by subsection (2).

Note:    A security interest granted by a company in relation to which paragraph (a) applies that is unperfected at the critical time may vest in the company under section 267 or 267A of the Personal Property Securities Act 2009.

(2)    This subsection covers a PPSA security interest if:

(a)    at the critical time, or, if the security interest arises after the critical time, when the security interest arises:

(i)    the security interest is enforceable against third parties under the law of Australia; and

(ii)    the security interest is perfected by registration, and by no other means; and

(b)    the registration time for the collateral is after the latest of the following times:

(i)    6 months before the critical time;

(ii)    the time that is the end of 20 business days after the security agreement that gave rise to the security interest came into force, or the time that is the critical time, whichever time is earlier;

(iii)    if the security agreement giving rise to the security interest came into force under the law of a foreign jurisdiction, but the security interest first became enforceable against third parties under the law of Australia after the time that is 6 months before the critical time—the time that is the end of 56 days after the security interest became so enforceable, or the time that is the critical time, whichever time is earlier;

(iv)    a later time ordered by the Court under section 588FM.

…

(emphasis added)

34    Section 588FM of the Corporations Act provides that:

(1)    A company, or any person interested, may apply to the Court (within the meaning of section 58AA) for an order fixing a later time for the purposes of subparagraph 588FL(2)(b)(iv).

Note:    If an insolvency related event occurs in relation to a company, paragraph 588FL(2)(b) fixes a time by which a PPSA security interest granted by the company must be registered under the Personal Property Securities Act 2009, failing which the security interest may vest in the company.

(2)    On an application under this section, the Court may make the order sought if it is satisfied that:

(a)    the failure to register the collateral earlier:

(i)    was accidental or due to inadvertence or some other sufficient cause; or

(ii)    is not of such a nature as to prejudice the position of creditors or shareholders; or

(b)    on other grounds, it is just and equitable to grant relief.

(3)    The Court may make the order sought on any terms and conditions that seem just and expedient to the Court.

(emphasis added)

35    The authorities relating to applications made under s 588FM of the Corporations Act indicate that:

(a)    generally the principles and authorities in relation to the exercise of the Court’s discretion in former s 266(4) of the Corporations Act, have continuing relevance and are of existence in guiding the Court’s discretion in s 588FM when considering affixing a later time for the purposes of s 588FL(2)(b): see Re Barclays Bank PLC [2012] NSWSC 1095 per Black J (at [4]); Caason Investments Pty Ltd v Ausroc Metals Ltd [2016] WASC 267 per Master Sanderson (at [15]); see also Re Kaizen Global Investments Ltd (2017) 120 ACSR 220 per Moshinsky J (at [87(c)]);

(b)    section 588FM(2) confers a broad judicial discretion informed, at least at one level, by what is ‘just and equitable’; as such, it is to be read liberally for the purpose intended by the statute in question and is not to be constrained or limited by glosses or implications not found in the relevant statute: Kaizen Global (at [87(b)], citing Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd (2003) 135 FCR 206 per Whitlam, Branson and Allsop JJ (at [187]);

(c)    ‘inadvertence’ for the purposes of s 588FM(2)(a)(i) includes being ‘not properly attentive’: see Barclays Bank (at [13]); see also Re ACE Funding Ltd (2003) 44 ACSR 363 per Conti J (at [8]), cited in Re Enviro Pallets (NSW) Pty Ltd (in liq) [2013] QSC 220 per Philippides J;

(d)    Similarly:

‘inadvertence’ may also be established where a party operates under a mistake as to the consequences of failing to register a security interest ... at least where an error of a secured creditor in not attending to registration of its security within time is innocent and does not result from any disregard of its statutory obligations.

(Re Cardinia Nominees Pty Ltd [2013] NSWSC 32 per Black J (at (15] citations omitted));

(e)    once ‘inadvertence’ has been established for the purposes of s 588FM(2), it remains necessary for the Court to exercise its discretion as to whether to make the order sought and whether such an order should be made on terms and conditions under s 588FM(3) of the Corporations Act;

(f)    the length of the delay prior to registration of the security interest is a relevant factor in the exercise of the Court’s discretion under s 588FM: see Dempsey Resources Pty Ltd v Continental Coal Ltd [2009] FCA 1157 per Gilmour J (at [20]); Barclays Bank (at [14]); Cardinia Nominees (at [18]). In CBFC Ltd v Corporate Consulting (Australia) Pty Ltd [2010] QSC 395 (at [15]-[19]), a ‘significant’ delay did not prevent the grant of an extension under former s 266 as there was no evidence that any subsequent creditor searched the register at the relevant time;

(g)    a matter which is ‘highly relevant’ to the Court’s discretion under s 588FM is whether there are any other security interests registered against the grantor: Barclays Bank (at [15]). This matter assists the Court in concluding whether the late registration will (or will not) ‘disturb or affect an accrued or accruing rights meriting consideration’: Barclays Bank (at [15]);

(h)    other relevant factors include: whether the secured party would not have advanced funds to the grantor under loan documents without the security interest, and further whether the granter agreed to provide the security interest and executed on the basis that such interests would be registered: Enviro Pallets; and

(i)    unless an applicant leads evidence of the company’s solvency and the likelihood of its solvency being maintained into the foreseeable future, an extension should not be granted unless steps are taken to protect the interest of unsecured creditors: Re Guardian Securities Ltd [1984] 1 NSWLR 95 per McLelland J (at 97). One of the steps that might be taken to achieve this result is to grant an extension of time, whilst reserving a right to the company, any liquidator or administrator appointed to it or any unsecured creditor to apply at a later time to discharge or vary the order: Guardian Securities (at 97-98); Cardinia Nominees (at [24]); Re Apex Gold Pty Ltd [2013] NSWSC 881 per Hammerschlag J.

CONSIDERATION

Inadvertence

36    Squadron Resources submits that the failure to register the security interests on the PPSR against the defendants within 20 business days of the interest coming into the effect:

(a)    was innocent and did not result from any ‘disregard of its statutory obligations’; and

(b)    instead, the failure to register resulted from Squadron Resources’ former solicitors ‘being not properly attentive’.

37    The circumstances in this case are analogous to the circumstances in Dempsey Resources, where the general manager believed, but did not specifically instruct, a director to register a charge with ASIC. The director believed the registration would have been conducted by the general manager. In that case, Gilmour J held that the failure to register was due to inadvertence. Each party believed the other was attending to the registration.

38    In these circumstances, the failure to make separate registrations was either accidental or due to inadvertence on the part of Squadron Resources’ former employees and/or former solicitors. Nothing in this observation is meant, or ought be construed, as being in any way a form of censure or suggestion of neglect on the part of Squadron Resources’ former solicitors. I do not consider any evidence filed in this proceeding revealed or suggested this; indeed, they have not been heard, nor do I consider, in the circumstances of the application, did they need to be heard. If follows that I accept the assertion at [36(a)]. No finding is made regarding the assertion at [36(b)].

Length of delay

39    In the present case, Squadron Resources submits correctly that the 20 business day period envisaged under s 588FL(2)(b)(ii) of the Corporations Act expired on 20 July 2016. Not an insignificant period has elapsed. However, cases such as CBFC Ltd show that a significant period of delay is not the only factor to consider.

40    Relevantly, in Re Appleyard Capital Pty Ltd [2014] NSWSC 782, Justice Brereton explained (at [30]-[31]):

30    Thus, although I accept, as the authorities make clear, that the presence or absence of prejudice to unsecured creditors is a relevant discretionary consideration, relevant prejudice is not necessarily established merely by showing that the dividend to unsecured creditors will be less if the security interest does not vest in the company; the unsecured creditors may well have been in no different a position had the security interest been timely registered. The type of prejudice that is of particular relevance is prejudice attributable to the delay in registration, rather than prejudice from making the order (which is inevitable). This is the type of prejudice contemplated the legislation (see s 588FM(2)(a)(ii), which refers to prejudice from the failure to register earlier, not from making the order), and referred to by Buckley J in Cardiff Workmen's Cottage Co; by Long Innes J in Limited Company (see also Flinders Trading Coat ACLR 225 per Bray CJ; at ACLR 234 per Mitchell J); and by McLelland J in Guardian Securities (at 98). The period of delay in effecting registration is relevant, because the shorter the delay the less likely that the failure to register within time will have had any impact. The significance of the passage of time is mainly related to the possibility of competing interests having arisen, in particular through others having dealt with the company on the footing that the collateral was unencumbered.

31    Accordingly, while the interests of unsecured creditors are relevant, the mere fact that if the extension is granted they will be deprived of the benefit of the security interest vesting in the company, and thus receive a lesser dividend, is no objection to making an order. It would be otherwise if the position of the unsecured creditors was detrimentally affected by the delay in registration, for example if they traded with the company on the faith of a register that showed no security interest.

(emphasis added)

41    Further, in Caason Investments, Master Sanderson made orders in similar circumstances where the delay in registration was 18 months and only one other creditor had registered a security interest against the defendant following execution of the GSD but before the plaintiff registered. Master Sanderson noted (at [15]):

The period of delay in affecting registration is relevant, because the shorter the delay the less likely that the failure to register within time will have had any impact. The significance of the passage of time is mainly related to the possibility of competing interests having arisen, in particular through others having dealt with a company that the collateral was unencumbered.

42    I note that the ‘delay’ in this case had exceeded two years by the time the matter came before the Court for final hearing, however, as the delay in registration has not prejudiced secured creditors, I do not consider the delay to be an impediment to the application in these circumstances.

Other creditors

43    In this application, a relevant consideration is whether there is prejudice attributable to the failure to effect registration earlier such that the delay in the registration of the security interest causes prejudiced to creditors who have transacted with the company to their detriment, being unaware of the creation of a security interest: Appleyard (at [30]); Alleasing Pty Ltd v OneSteel Manufacturing Pty Ltd [2017] FCA 656 (at [17]).

44    The PPSR searches conducted in relation to the defendants on behalf of Squadron Resources on 26 June 2018 are detailed above (at [21]-[22]).

45    Squadron Resources’ solicitors wrote to each of the persons described above (at [subparas 22(2)(a)-(e)]) above to inform them of this application. Squadron Resources’ solicitors have received a response to the effect that these interest holders did not object to the application.

46    As the security interests described in the subparas (b)-(e) above are PMSIs, these registrations have priority over Squadron Resources’ security interest over the third defendant regardless of the timing of registration: s 62 of the Personal Property Securities Act 2009 (Cth).

47    It is otherwise the case that ANZ’s security interests over accounts have priority over Squadron Resources’ security interests in such accounts: s 75 of the Personal Property Securities Act 2009 (Cth).

Defendants’ position

48    An additional discretionary factor in favour of the extension of time being granted in this case is the fact that the grantor of the security interests, the defendants, were informed of this application. Further, the defendants are parties to this application and have been served with copies of the application and do not oppose these orders. This is consistent with the Court’s view in earlier cases that applications under s 588FM ought not be brought ex parte.

Other discretionary considerations

49    While the interests created under the Mineral Resources (Sustainable Development Act) 1990 were duly registered in June 2016, Squadron Resources and other noteholders (collectively, the Noteholders) were unaware of the failure to register these securities on the PPSA. Decisions have been made concerning notes extensions, waivers and other consideration on the basis and assumption securities were of full force and effect. Although those Noteholders may well have alternative recourse in light of the inadvertent non registration on the PPSA, the making of orders on this application may well make it unnecessary for those parties to pursue alternative remedies. In the absence of prejudice to other parties, resolving or ameliorating these circumstances may avoid or diminish the need for action to be pursued by the Noteholders to be restored to the bargain they transacted in June 2015 (and which HeadCo has had benefit of since that time).

CONCLUSION

50    I consider that the requirement of an ‘accidental’ failure or ‘inadvertence’ under s 588FM(2)(a)(i) of the Corporations Act is satisfied in these circumstances; alternatively, that it is just and equitable to grant relief under s 588FM(2)(b). Accordingly, the Court has jurisdiction under that section to grant an order fixing a later time for the purposes of s 588FL(2)(b)(iv) of the Corporations Act. For those reasons, the following orders were made:

(1)    Pursuant to section 588FM of the Corporations Act 2001 (Cth), 26 June 2018 be fixed as the later time for the purpose of subparagraph 588FL(2)(b)(iv), in respect of any security interests granted by the Defendant in favour of the Plaintiff registrable under the Personal Property Securities Act 2009 (Cth) in connection with the general security deed between the Plaintiff and the Defendants dated on or about 22 June 2016, for the registrations with registration numbers listed in ‘Annexure A’ to these orders.

(2)    There be no order for costs.

Associate:

Dated:    24 August 2018

Annexure A

Federal Court of Australia

In the matter of Highlake Resources Pty Ltd (ACN 062 487 585); Matrix Gold Pty Ltd (ACN 062 487 585); Maldon Resources Pty Ltd (ACN 090 458 665)