Federal Court of Australia

AMAL Security Services Pty Ltd (Trustee) v 452HM Pty Ltd, in the matter of 452HM Pty Ltd [2025] FCA 603

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 588FM of the Corporations Act 2001 (Cth) (Corporations Act), 11 June 2025 be fixed as the later time for the purposes of s 588FL(2)(b)(iv) of the Corporations Act for the Plaintiff to register on the Personal Property Securities Register (PPSR) established under the Personal Property Securities Act 2009 (Cth) the security interests identified as PPSR Registration Number 202411120050834 as against 452HM Pty Ltd (ACN 655 334 633) in its own name as trustee of the Parc Group Security Trust.

2.    Liberty be reserved to any administrator, deed administrator, liquidator, or unsecured creditor of the defendant to apply to vary or set aside this order if any winding up of the defendant commences or an administrator is appointed to the defendant under ss 436A, 436B or 436C of the Corporations Act, or the defendant executes a deed of company arrangement, within six months of the date of this order.

3.    The application otherwise be dismissed.

4.    There be no order as to costs.

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

REASONS FOR JUDGMENT

MOORE J:

1    These reasons relate to an urgent application that was filed on 5 June 2025 concerning an error which was made in describing the interest of the plaintiff (AMAL) as a secured party on the Personal Property Securities Register (PPSR). The application came before me on 6 June 2025. I was provided with helpful written and oral submissions by counsel for AMAL, Ms Nichola Derrington.

2    The circumstances giving rise to the error are as follows.

3    On 30 August 2021, a Security Trust Deed was executed which appointed AMAL, in its capacity as trustee of the Parc Group Security Trust (Parc Trust), as security trustee. Relevantly, the Parc Trust does not have an Australian Business Number (ABN).

4    The purpose of that appointment was to permit AMAL to act as the trustee and agent for beneficiaries under the Trust Deed to administer and enforce security that was proposed to be given for the benefits of “Participants”. Those Participants were to provide credit or financial accommodation to borrowers (known as Security Providers).

5    On the same day (30 August 2021), a different company, AMAL Trustees Pty Ltd as trustee of the Causeway Wholesale Private Income Trust (the Causeway Trust) executed an “Accession Deed” within the meaning of the Security Trust Deed (the Accession Deed). In doing so, it became a Participant.

6    Contemporaneously, AMAL Trustees as trustee for the Causeway Trust entered into a Loan Facility Agreement, inter alia, with Australian Hotel Management as borrower and AMAL as trustee for the Parc Trust.

7    On or around 30 June 2022, AMAL Trustees was replaced as trustee of the Causeway Trust by AMAL. On that day:

(a)    AMAL Trustees and AMAL (acting now in its capacity both as trustee of the Parc Trust and as trustee of the Causeway Trust) executed a deed of assignment by which AMAL Trustees assigned its rights as a Participant under the Accession Deed to AMAL in its capacity as trustee of the Causeway Trust; and

(b)    AMAL Trustees and AMAL (again acting in two capacities) executed a deed of assignment by which AMAL Trustees assigned its rights under the Loan Facility Agreement and associated guarantees to AMAL in its capacity as trustee of the Causeway Trust.

8    On 15 October 2024, AMAL (acting in both its capacity as trustee of the Parc Trust and as trustee of the Causeway Trust) entered into a Deed of Forbearance with Australian Hotel Management and a number of other parties, including the defendant (the Deed of Forbearance).

9    The Deed of Forbearance relevantly provided:

(a)    by its Recitals, that Australian Hotel Management was in default of its obligations under the Loan Facility Agreement, but the Lender (being AMAL in its capacity as trustee of the Causeway Trust) was willing to forbear from taking enforcement action until 1 June 2025 on the terms set out in the Deed; and

(b)    by clause 6, that forthwith upon the entry into the Deed of Forbearance, the defendant would execute and deliver to the lender a guarantee and general security deed, substantially in the form set out in schedules 3 and 4 to the Deed of Forbearance.

10    Contemporaneously, the defendant executed the Deed of Guarantee and Indemnity contemplated by the Deed of Forbearance (the Deed of Guarantee). By that agreement, the defendant relevantly guaranteed to AMAL, in its capacity as trustee of the Causeway Trust, payment by Australian Hotel Management of its obligations under the Loan Facility Agreement.

11    Similarly, the defendant executed a General Security Deed in favour of AMAL, in its capacity as trustee of the Parc Trust (the General Security Deed). By that agreement, the defendant created a security interest in all its personal property as “collateral” (including anything in respect of which the Grantor has a sufficient right or interest under the Personal Property Securities Act 2009 (Cth) (PPSA)) in favour of AMAL in its capacity as trustee of the Parc Trust, to secure the payment of the “Secured Money”. “Secured Money” was defined to include all money and damages owing presently or in the future (actually or contingently) and in any capacity.

12    On 12 November 2024, AMAL’s then solicitors caused a registration to be placed on the PPSR with number 20241112005083, listing the defendant as the grantor (the relevant search in evidence identifies it by its ACN) in relation to the security interest conferred by the General Security Deed.

13    However, in error, the secured party is listed as:

THE TRUSTEE FOR CAUSEWAY WHOLESALE PRIVATE DEBT MASTER FUND (ABN - 82988180446).

As described above, that is AMAL, but not in the capacity in which it holds the security interest.

14    An application has been filed for the winding up of the defendant. That application has been adjourned until 18 June 2025. Prior to that occurring, AMAL wishes to exercise its rights under s 436C of the Corporations Act 2001 (Cth) (Corporations Act) as a secured creditor to appoint a voluntary administrator.

15    In that regard, AMAL seeks to do two things pursuant to this application. First, acting prophylactically, it wishes to obtain a declaration that registration number 202411120050834 on the PPSR in respect of the defendant was not ineffective by reason of the secured party being described as “the Trustee for Causeway Wholesale Private Debt Master Fund (ABN – 82988180446)”. Further, or alternatively, it seeks an order extending the time for registration: i.e. an order pursuant to s 588FM of the Corporations Act that 11 June 2025 be fixed as the later time for the purposes of s 588FL(2)(b)(iv) of the Corporations Act for AMAL to register the security interest on the PPSR as against the defendant in AMAL’s own name as trustee of the Parc Trust.

16    Section 150 of the PPSA permits a person to register a financing statement with respect to a security interest. Section 153 then identifies the data which must be included in the financing statement.

17    For present purposes, the relevant provision is item 1 of the table in s 153(1), which provides that the data that must be included is:

The details prescribed by the regulations, in relation to each secured party, of (a) the secured party; or (b) a person nominated by the secured party who has authority to act on behalf of the secured party.

18    Where a body corporate is not a trustee of a trust that has an ABN, the prescribed details are those set out in paragraph 1.3 of Schedule 1 of the Personal Property Securities Regulations 2010 (Cth) (the Regulations). Relevantly, that paragraph provides that the financing statement must identify the ACN of the body corporate.

19    On the other hand, where the body corporate is a trustee of a trust that has an ABN, the trust’s ABN must be listed: see paragraph 1.5 of Schedule 1 of the Regulations.

20    The effect of defects in registrations are then dealt with in s 164 of the PPSA, which relevantly provides:

Defects in registration — general rule

(1)    A registration with respect to a security interest that describes particular collateral is ineffective because of a defect in the register if, and only if, there exists:

(a)    a seriously misleading defect in any data relating to the registration, other than a defect of a kind prescribed by the regulations; or

(b)    a defect mentioned in section 165.

21    Section 165 then relevantly provides (noting that s 165(a) – (c) are not presently relevant):

Defects in registration—particular defects

For the purposes of paragraph 164(1)(b), a defect in a registration that describes particular collateral exists at a particular time if any of the following circumstances exist:

(a)    …

…

(d)    in any case—circumstances in relation to the data related to the registration that are prescribed by the regulations.

22    This language is slightly cumbersome, but it is tolerably clear that sub-paragraph (d) is referring to particular circumstances that are specified by the Regulations. In other words, there is a defect in a registration if:

(a)    the prescribed circumstances specified by the Regulations exist;

(b)    any of s 165(a) – (c) apply (which they do not in the present case); or

(c)    the defect is “seriously misleading”,

but not otherwise.

23    There are no circumstances prescribed by the Regulations, and thus s 165(d) has no current field of operation.

24    A different approach to the construction of s 165 of the PPSA was adopted in Re AMAL Trustees Pty Ltd (in its capacity as trustee for the Longreach Direct Lending Fund) (2023) 170 ACSR 539; [2023] FCA 1519 (Re AMAL Trustees) per Shariff J. In that decision, his Honour, at [17(d)], recorded the contention of counsel that:

…s 165(d) of the PPSA provides that a defect exists where the registration does not record the data prescribed by the regulations;

and then observed at [19] that he agreed with counsel’s contentions.

25    I do not agree that this is what s 165(d) provides. That gives no proper operation to the word “circumstances”. Rather, the operation of s 165(d) is as set out above.

26    Thus the relevant question in the present case is whether the defect is “seriously misleading”. In Future Revelation Ltd v Medica Radiology & Nuclear Medicine Pty Ltd (2013) 283 FLR 122; [2013] NSWSC 1741 at [6], Brereton J observed as follows:

Canadian case law suggests that the test for whether a defect is “seriously misleading” is whether it will result in the registration not being disclosed on a search [see Re Lambert (1994) 20 OR (3d) 108; GMAC Lease Co Ltd v Moncton Motor Home & Sales (2003) 227 DLR (4th) 154 at [58]]. That makes sense, as the purpose of registration is to enable the existence of the security interest in the collateral to be searched and ascertained. A person searching in the PPSR is likely to be concerned with the identity of the grantor and/or the collateral. In terms of searching the PPSR, while there is facility to search by reference to the identity of the grantor and the collateral, there is no facility to search by reference to the identity of the secured party.

27    Brereton J went on to observe as follows (at [7]):

In the present case, a search by reference to the identity of the collateral or the grantor would have disclosed the relevant security interest. Such a search would have identified clearly enough the secured party, namely Suncorp, even though its ABN and not ACN was stated. In my view, it is very clear that this defect was not seriously misleading or indeed for that matter misleading at all. Accordingly, it seems to me by operation of s 164(1) that the registration is not ineffective by reason of the defect that has been identified.

28    I agree that this is an appropriate approach to the construction of s 164 of the PPSA. Ms Derrington submitted that, in circumstances where:

(a)    the correct ACN of the Defendant was identified, which is searchable;

(b)    the existence of a security interest of the correct type was identified;

(c)    AMAL is in fact the trustee of the relevant Causeway Trust which is identified, including by its ABN; and

(d)    AMAL’s contact details are correctly recorded, such that anyone can find out more details of the security that is registered,

the registration is not “seriously misleading”.

29    I agree with this submission. AMAL will have the benefit of this observation and the observations set out above about the proper construction of s 165(d). However, given that this is an ex parte application, I am not prepared to make a declaration in the form sought purporting to determine in a final and binding way the status of the registration. For one thing, there is no contradictor, and it is possible that there is some persuasive argument in favour of a different conclusion.

30    As already noted, AMAL sought in the alternative an extension of time. I am prepared to make an order extending time in the form sought, including because AMAL accepts it is also appropriate to make an order reserving liberty to any administrator, deed administrator, liquidator, or unsecured creditor of the defendant to apply to vary or set aside such an order if any winding up of the defendant commences or an administrator is appointed to the defendant under ss 436A, 436B or 436C of the Corporations Act, or the defendant executes a deed of company arrangement, within six months of the date of this order.

31    In Adia Venture Ltd v Traffic Technologies Ltd [2025] FCA 564, O’Callaghan J observed (at [20]):

…where there is an order or resolution for the winding up of a company, an administrator is appointed or a deed of company arrangement executed, any security interest which has not been registered on the PPSR within the time period set out in s 588FL(2) of the Corporations Act will vest in the company.

32    Section 588FL(2)(b) relevantly prescribes the time for the registration of collateral to be the latest of the following times:

(a)    6 months before the critical time (being the relevant date of winding up, etc);

(b)    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; or

(c)    a later time ordered by the Court under s 588FM.

33    The Court is empowered under s 588FM to extend time where the failure to register the collateral earlier was accidental, or due to inadvertence or some other sufficient cause, or the extension would not be of such a nature as to prejudice the position of creditors or shareholders: s 588FM(2)(a).

34    The scope of what constitutes an accident or inadvertence includes a lack of understanding on the part of a director (In the matter of Cardinia Nominees Pty Ltd [2013] NSWSC 32 at [15] per Black J) or a mistake or omission by a lawyer (Re AMAL Trustees at [25] per Shariff J).

35    In the present case, the error arose through the inadvertence of AMAL’s former solicitors, and is perhaps explicable by the complexity of the arrangements that were entered into by AMAL. The error is not one that is likely to have caused any prejudice to a creditor. Notice that the relevant interest was claimed has been recorded on the PPSR since 12 November 2024, which is a date within the time otherwise required for registration. The entity identified is a trust, the trustee of which is AMAL, and the correct contact details are identified.

36    In those circumstances, I am satisfied that there is no reason not to extend time, and I make an order accordingly. I will, however, also make the proposed order reserving liberty for relevant parties to apply to vary or set aside the order extending time if any winding up of the defendant commences or an administrator is appointed to the defendant under ss 436A, 436B or 436C of the Corporations Act, or the defendant executes a deed of company arrangement, within six months of the date of this order.

Associate:

Dated:    10 June 2025