Central Cleaning Supplies (Aust) Pty Ltd V Elkerton (2014)

CITATION [2014] VSC 61

Central Cleaning supplied cleaning equipment on retention of title terms to Swan Services.  Central Cleaning and Swan Services had entered into a master agreement in the form of a credit application before the registration commencement date under the PPSA.

Goods were supplied after the registration commencement date, under separate purchase orders, and when delivered were accompanied by invoices containing the retention of title terms. Central Cleaning had not made a PPSA registration.

Swan Services went into liquidation (with Elkerton appointed as liquidator). 

The court held that the retention of title terms were incorporated into the separate contracts made when goods were supplied, not in the master agreement. Accordingly they did not benefit from temporary perfection as transitional security interests. Industrial Progress Corporation Pty Ltd v Wilson[2013] WASC 225 was distinguished because there the retention of title terms had clearly been incorporated into the pre-registration commencement date master agreement.  This decision was reversed on appeal: see [2015] VSCA 92.

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.