CITATION  VSC 231
JUDGE/S GARDINER AsJ
Australian Music Pty Ltd bought goods on retention of title terms from Yamaha. The liquidators of Australian Music claimed payments made to Yamaha for the goods were unfair preferences ‘in respect of an unsecured debt’ Corporations Act, s588FA.
Yamaha sought to have the liquidators’ proceedings struck out on grounds that the debt was clearly secured. Goods had been supplied on retention of title terms both before and after commencement of the PPSA.
The court held that a debt secured by pre-PPSA retention of title was ‘unsecured’ for s588FA purposes. Retention of title had not, before the PPSA, been security; but the PPSA changed this ‘by a statutory construct, to afford a security interest’. The true position would depend on when stock was supplied and when debts arose, but the liquidators’ position was at least arguable.
Yamaha’s application for summary judgement was dismissed. The court’s position is the opposite of that reached by the Federal Court in Hussain v CSR Building Products Limited FCA 392 a week earlier.
The summary of the pertinent points in this legal case update has been provided by Steve Pemberton, Lawyer and Consultant, as an extract from his digest of PPSA cases.