Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.7B - RECOVERING PROPERTY OR COMPENSATION FOR THE BENEFIT OF CREDITORS OF INSOLVENT COMPANY  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 3 of Part 8B.6 (for provisions relating to Division 2B ), Division 5 of Part 8B.6 (for provisions relating to Divisions 2 and 2A ) and Division 6 of Part 8B.6 (for provisions relating to Divisions 3 , 4 , 5 and 6 ).

Division 2A - Vesting of PPSA security interests if not continuously perfected  

SECTION 588FL   VESTING OF PPSA SECURITY INTERESTS IF COLLATERAL NOT REGISTERED WITHIN TIME  

Scope

588FL(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 ;

(iv) a restructuring practitioner for the company is appointed under section 453B ;

(v) a company makes a restructuring plan under Division 3 of Part 5.3B ; 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 .

588FL(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 .

Note 1: For the meaning of critical time , see subsection (7).

Note 2: For when a security interest is enforceable against third parties under the law of Australia, see section 20 of the Personal Property Securities Act 2009 .

Note 3: A security interest may become perfected at a particular time by a registration that is made earlier than that time, if the security interest attaches to the collateral at the later time (after registration). See section 21 of the Personal Property Securities Act 2009 .

Note 4: The Personal Property Securities Act 2009 provides for perfection by registration, possession or control, or by force of that Act (see section 21 of that Act).

588FL(3)    
(Repealed by No 35 of 2011, s 3, Sch 1 [ 8] (effective 30 January 2012).)

Vesting of security interest in company

588FL(4)    
The PPSA security interest vests in the company at the following time, unless the security interest is unaffected by this section because of section 588FN :

(a)    if the security interest first becomes enforceable against third parties at or before the critical time - immediately before the event mentioned in paragraph (1)(a);

(b)    if the security interest first becomes enforceable against third parties after the critical time - at the time it first becomes so enforceable.

Note: For the meaning of critical time , see subsection (7).

Property acquired for new value without knowledge

588FL(5)    
Subsection (4) does not affect the title of a person to personal property if:

(a)    the person acquires the personal property for new value from a secured party, from a person on behalf of a secured party, or from a receiver in the exercise of powers:

(i) conferred by the security agreement providing for the security interest; or

(ii) implied by the general law; and

(b)    

at the time the person acquires the property, the person has no actual or constructive knowledge of the following (as the case requires):

(i) the filing of an application for an order to wind up the company;

(ii) the passing of a resolution to wind up the company;

(iii) the appointment of an administrator of the company under section 436A , 436B or 436C ;

(iv) the execution of a deed of company arrangement by the company under Part 5.3A ;

(v) the appointment of a restructuring practitioner for the company under section 453B ;

(vi) the making of a restructuring plan by the company under Division 3 of Part 5.3B .

Note: For what is actual or constructive knowledge, see sections 297 and 298 of the Personal Property Securities Act 2009 .

588FL(6)    
In a proceeding in Australia under this Act, the onus of proving the fact that a person acquires personal property without actual or constructive knowledge as mentioned in paragraph (5)(b) lies with the person asserting that fact.

588FL(7)    

In this section:

critical time
, in relation to a company, means:

(a) if the company is being wound up - when, on a day, the event occurs by virtue of which the winding up is taken to have begun or commenced on that day under section 513A or 513B ; or

(b) if the company is under administration or is subject to a deed of company arrangement - when, on a day, the event occurs by virtue of which the day is the section 513C day for the company; or

(c) if the company is under restructuring or is subject to a restructuring plan - when, on a day, the event occurs by virtue of which the day is the section 513CA day for the company.