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A recent Federal Court decision in relation to the Administrators of the Hastie Group has implications for secured creditors under the Personal Property Securities Regime.


The Federal Court has recently given a pragmatic decision allowing administrators to sell certain equipment held by the Hastie Group over which Personal Property Security Registrations had been made. The decision appears to effectively limit the rights of holders of PPSR interests in relation to goods in the context of facilitating the job of the administrators.  It is relevant to set out the circumstances.


The property the subject of the judgment was equipment valued at $6.4 million.

It was spread across 36 different locations and the maximum sale value of any of that plant and equipment at any single location did not exceed $855,000.

A number of the sites where the equipment was located were not available to the administrators and the cost of the weekly rental of the sites occupied by plant and equipment held by Hastie would have been in the order of $61,000 a week.

There were 995 registrations noted against the Hastie Group companies on the PPSR in relation to this plant and equipment. After a process that commenced on 28 May by the administrators, prior to the Court application only approximately $2 million worth of assets had been identified and there remained 3,684 items which represent 77% of the total number of items.

The court’s orders related to the administrator’s actions in relation to those unclaimed items.

The timeline was as follows:

  • On 28 May 2012, the administrators wrote to creditors who had an interest on the PPSR in respect of Hastie plant and equipment enclosing a pro-forma security summary and asked them to provide notification as a matter of urgency, no later than 31 May.
  • By 19 June, 80% of secured creditors had failed to respond. In addition, a number of responses did not adequately particularise the equipment or the security agreement and were difficult for the administrators to act on.
  • On 26 June, the administrators wrote to 12 financiers who appeared to have a secured claim and asked them to consent to the sale of plant and equipment referable to their interests, or give notice of their objection to the sale before 2 July.
  • On 28 June, the administrators put an advertisement in The Australian with copies in The Sydney Morning Herald, The Age, The Adelaide Advertiser, The West Australian and The Brisbane Courier Mail indicating that creditors should notify the administrators of claims concerning assets, by 4 July 2012.
  • On 4 July, the administrators also sent an email to 3,000 creditors whose addresses where known to the administrators.

The responses that the administrators received identified only 23% of items and the administrators formed the view that given the ongoing costs, including rent of premises to store the equipment and the steps that they had taken to establish the claims, it was in the best interests of the companies and their creditors that all unclaimed plant and equipment be sold.


The Court gave directions under section 447D of the Corporations Act permitting the administrators to dispose of plant and equipment.  The orders stated that the administrators could undertake a plan of action as follows:

  • Place an advertisement on 7 July 2012 indicating that the auction sales of the plant and equipment would occur no earlier than 10 July.
  • The administrators then had to place any proceeds of the sale in an escrow account for a period of 3 months following the completion of the sale.
  • Following the sale process they had to write to all known creditors advising them that the assets had been sold and of the 3 month time period to make  any claim.
  • After 3 months the administrators could then apply the proceeds of sale in the ordinary course of the administration of the companies.

The Court indicated that it was satisfied that it was appropriate to grant the relief and make the direction on the basis that there had been genuine and substantial difficulties in identifying those items of plant and equipment that might be subject to security interests and that the administrators had taken a number of steps to contract creditors appropriately.

Implications for Secured Parties

The order does not reference section 442C of the Corporations Act but that section effectively allows the court to make orders allowing an administrator to override the claims of secured creditors, provided sufficient protections are in place.

This decision effectively limited any secured creditor (who had not responded to the administrators’ correspondence) to a three month claim window from 10 July 2012 after which time it was unlikely there would be any assets left to satisfy any claim.

Implications for the PPSR regime

This decision highlights that a “noticeboard” approach to registration of securities without a robust process for interested parties, such as administrators, to obtain details of interests claimed in a timely and detailed manner, will be an impediment to an efficient system.

It also highlights that secured parties need to move quickly in response to notices such as those sent by the Hastie administrators.  The effective time period for a claim is limited under this decision to as little as 5 months.

Secured parties who want an administrator to give effect to their PPSR registration will need to provide adequate particulars to allow this.  

Contact details


William Khong  
T:  +61 3 9321 9883


James Hamilton 
T:  +61 2 8083 0475

Lyn Nicholson   
Special Counsel
T:  +61 2 8083 0463


Trent Taylor, Partner
T: +61 7 3135 0668

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is receied or that it will continue to be accurate in the future. 


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