Australia and New Zealand Banking Group Ltd Re Harsit Holdings Pty Ltd [2008] NSWSC 1379

New South Wales Supreme Court

CITATION : Australia and New Zealand Banking Group Ltd Re Harsit Holdings Pty Ltd [2008] NSWSC 1379

HEARING DATE(S) : 17/12/08

JUDGMENT DATE : 19 December 2008

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

DECISION : Application dismissed.

CATCHWORDS : CORPORATIONS - registration of charges - application for extension of time for registration - power of sale already exercised as to whole of charged property - whether any utility in order sought

LEGISLATION CITED : Corporations Act 2001 (Cth), Division 4, Part 7.5, ss 266(1), 266(4))

CATEGORY : Principal judgment

CASES CITED : NV Slavenburg's Bank v Intercontinental Natural Resources Ltd [1980] 1 All ER 955

PARTIES : Australia and New Zealand Banking Group Limited - Plaintiff

FILE NUMBER(S) : SC 6270/08

COUNSEL : Mr J M White - Plaintiff

SOLICITORS : Kemp Strang - Plaintiff

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

FRIDAY 19 DECEMBER 2008

6270 /08 AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED RE HARSIT HOLDINGS PTY LIMITED JUDGMENT 1 I am dealing with an application by Australia and New Zealand Banking Group Limited ("ANZ") for an order under s 266(4) of the Corporations Act 2001 (Cth) extending the period for lodgment in respect of a charge created in favour of ANZ by Harsit Holdings Pty Limited. 2 The charge was created over 13,424,402 shares in the capital of Everest Babcock & Brown Ltd, a company admitted to the official list of Australian Securities Exchange ("ASX"). The shares were listed for quotation on the stock market of ASX. 3 The charge was accordingly "a charge on a marketable security" as referred to in s 262(1)(g) and, because none of subparagraphs (i) to (iii) was satisfied, it was, by virtue of that provision, a registrable charge. 4 The charge was created on 4 February 2008. In the absence of due lodgement within 45 days after creation and an order of the court extending the lodgement period, s 266(1) operates to make the charge void as a security on the particular property as against a liquidator of the chargor, a voluntary administrator of the chargor or the administrator of a deed of company arrangement executed by the chargor. 5 Evidence of the circumstances in which failure to lodge occurred was given in the affidavit of the officer of ANZ involved in taking the security. He deposes, quite frankly, that he did not realise that the particular charge was a registrable charge. He knew that floating charges should be registered but he did not know that charges on marketable securities should be dealt with in the same way. The evidence establishes to my satisfaction that the failure to lodge was, in terms of s 266(4), "accidental or due to inadvertence". 6 Had the facts stopped there, the court would have proceeded to make the order. But Mr J M White of counsel, who appeared for ANZ, very properly placed before the court on the ex parte application a further fact of significance. ANZ had, before making the application, taken action in exercise of the express power of sale created by the charge. ANZ tendered on the application a contract note issued by a participating organisation of ASX confirming sale for the account of ANZ of a number of shares in Everest Babcock & Brown Ltd exceeding the number the subject of the charge. It was confirmed that the shares the subject of the charge were among those referred to in the contract note. The date of sale was 12 December 2008. 7 Mr White pointed out that the settlement date specified in the contract note was 17 December 2008. The application came before me at about 3pm on that day. Given the operation of the ASTC Settlement Rules and Division 4 of Part 7.5 of the Corporations Act, I took the view that the sale of the shares was, at that point, complete in such a way that ownership had passed from ANZ so as to be beyond recall and receipt of the proceeds was assured. 8 In these circumstances, the charge created by the document in question must be regarded as spent. ANZ, having realised the mortgaged property, no longer has any interest in it capable of standing as security for its customer's indebtedness. There is accordingly no longer any "security on" the property concerned capable of being "void … as against the liquidator, the administrator of the company, or the deed's administrator" in terms of s 266(1). This is made clear by observations of Lloyd J in NV Slavenburg's Bank v Intercontinental Natural Resources Ltd [1980] 1 All ER 955 at 967-968. 9 Since the order sought by ANZ will now be of no utility, the appropriate course is that its application be dismissed. **********