Mrs B has been Head of Credit for AB Ceilings P/L for 25 years and has seen the credit industry gradually improve. Just not the introduction of the #PPSA.
With more than 500 pages of legislation and terms like “PPS Lease”, “AllPAAP” and “PMSI”, how was she to know that what she did was wrong.
Mind you, she was a great credit manager, only a handful of customers had gone down, under her watch.
The PPSA seemed irrelevant.
Just register and everything will be okay, AB’s solicitors would say.
What did she do wrong?
She filled out the proof of debt and proxy, for the entirety of AB’s debt owed by a customer, to vote on a liquidators resolution.
By reason of 75-87(1) of the Insolvency Practice Rules (Corporations) (“IPRC”), she had surrendered her company’s secured position.
The above is a fictional characterisation of a recent case in which Justice Black saved the equivalent of Mrs B and AB.
His Honour declared that the security was not surrendered due to inadvertence, because:
– Mrs B did not know the rule;
– the Liquidator had never told Mrs B about the rule; and
– AB had previously reserved its position to deal with its security.
Moral of the story, if in doubt ask your friendly liquidator for assistance. Don’t just assume. Court costs are expensive.
The case name is Re Glacier Ceiling Battens Pty Ltd (in liq)  NSWSC 1832.
Here is a link to the case: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2017/1832.html