Supreme Court New South Wales Medium Neutral Citation: In the matter of Apex Gold Pty Ltd ACN 124 893 778 [2013] NSWSC 881 Hearing dates: 25 June 2013 Decision date: 25 June 2013 Jurisdiction: Equity Division - Corporations List Before: Hammerschlag J Decision: Order extending time for registration of a security interest Catchwords: CORPORATIONS - Corporations Act ss 588FL, 588FM - application under s 588FM for extension of time for registration of a security interest - order granted subject to conditions Legislation Cited: Corporations Act 2001 (Cth) Personal Property Securities Act 2009 (Cth) Cases Cited: Re Application of Guardian Securities Limited (1984) 1 NSWLR 95 In the matter of Cardinia Nominees Pty Limited [2013] NSWSC Category: Principal judgment Parties: RF Capital Pty Limited as Trustee for the RF Capital Trust ACN 127 097 081 Representation: Counsel: D.R. Sulan - Plaintiff Solicitors: Clayton Utz - Plaintiff File Number(s): 2013/193800 EX TEMPORE Judgment 1HIS HONOUR: The plaintiff moves the Court on Originating Process filed today with leave for an order under s 588FM(1) of the Corporations Act 2001 (Cth) ("the Act") fixing as 26 March 2013 the registration time for security interests granted by Apex Gold Pty Limited ACN 124 893 778 ("Apex Gold") to the plaintiff on (or about) 2 January 2013 in collateral, being all of the present and after-acquired property referred to in registration number 201303260070407 in the Register ("the Register"), established under the Personal Property Securities Act 2009 (Cth) ("PPSA"). 2Section 588FL(2) of the Act provides that: (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. 3Section 588FL(7) defines "critical time". In substance, it is the commencement of administration or winding up, as the case may be. 4Section 588FM(1) 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). 5Section 588FM(2) provides that: (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. 6Under s 588FM(3) the Court may make an order on terms and conditions. 7Section 588FL(2) has the effect that when a company is being wound up, an administrator is appointed, or a deed of company arrangement is executed, any PPSA security interest which was perfected, registered or enforceable against a third party after the latest of six months before the critical time, or 20 days after the security agreement came into force, or a later time ordered by the Court under s 588FM, vests in that company. 8The circulating security interest granted by Apex Gold to the plaintiff was not entered on to the Register until 26 March 2013. The last date for registration under s 588FL(2)(b)(ii) (being 20 business days after the security agreement was entered into) was 31 January 2013. The registration is, thus, out of time for the purposes of that section. 9The present application is supported by an affidavit of a partner in the firm of solicitors who acted for the plaintiff in obtaining the security concerned from Apex Gold, which is embodied principally in an instrument described as the Apex Gold General Security Agreement. 10Apex Gold is a wholly owned subsidiary of Apex Minerals NL ACN 098 612 974 ("Apex Minerals"). Earlier in 2012 the plaintiff gave financial accommodation to Apex Minerals and obtained security. In January this year the plaintiff agreed to forbear from taking action to enforce that security in consideration for, amongst others, Apex Gold entering into the Apex Gold General Security Agreement under which it charged all of its property and undertaking. 11Apex Minerals and Apex Gold may be or may about to become insolvent and the plaintiff intends to appoint both a voluntary administrator and receivers to both companies under its securities. 12Reference was made to relevant authorities concerning the approach to be taken to applications such as the present and to the form of orders which might be made: see Re Application of Guardian Securities Limited (1984) 1 NSWLR 95 per McLelland J, and, more recently, In the matter of Cardinia Nominees Pty Limited [2013] NSWSC 32 per Black J. 13The affidavit evidence satisfies me that the failure to register the collateral earlier was accidental or due to inadvertence on the part of the deponent, or those acting under her supervision. 14Between 26 March 2013 and the time this application was brought the deponent did not give active consideration to bringing this application because the plaintiff was taking steps to ensure that Apex Gold was able to complete two separate contracts for the sale of substantial parts of its business over an extended period during which instalments of the purchase price would be paid and which would result in full repayment to the plaintiff. She was not aware that the financial position of Apex Minerals was such that it could require a voluntary administrator to be appointed prior to 26 September 2013. 15The affidavit evidence establishes that apart from the security given to Apex Minerals and Apex Gold, only one other security interest was registered against Apex Gold between 2 January 2013 and 26 March 2013, being a security interest granted to Dyno Nobel Asia Pacific Pty Limited. 16All security interests granted after that date are purchase money security interests. 17The orders which I propose to make will make provision for the Dyno Nobel Asia Pacific Pty Limited security to be unaffected. 18I have been informed from the Bar table that the object of the order, Apex Gold, has not been given notice of these proceedings. Accordingly, it is appropriate to make provision for the reservation to that company of liberty to apply to discharge or vary this order within a short period of time, which provision I shall make. 19I am satisfied on the material before the Court that the orders sought should be made. There will, accordingly, be orders in the following terms: 1. Subject to the terms set out in Order 2, pursuant to section 588FM of the Corporations Act 2001 (Cth) ("the Act") that 26 March 2013 be fixed as the registration time for the security interests granted to the Plaintiff in the collateral being all of the present and after-acquired property referred to in registration number 201303260070407 in the register established under the Personal Property Securities Act 2009 (Cth) (the "Register"). 2. Order 1 be subject to terms that: (a) the order have no effect on the priority to be afforded to the security interest granted to Dyno Nobel Asia Pacific Pty Limited in the collateral referred to in registration number 201302260028309 in the Register; (b) liberty be reserved to any liquidator, administrator, deed administrator or unsecured creditor of Apex Gold Pty Ltd to apply to discharge or vary this order if any winding up of Apex Gold Pty Ltd commences, or an administrator of Apex Gold Pty Ltd is appointed under sections 436A, 436B or 436C of the Corporations Act, or Apex Gold Pty Ltd executes a deed of company arrangement, within 6 months of 26 March 2013; and (c) liberty reserved to Apex Gold Pty Ltd 7 days to apply to discharge or vary this order. 3. Notice of these orders is forthwith to be given to Apex Gold Pty Ltd. 4. These orders are to be entered forthwith. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 July 2013