Heard v Alleasing Pty Ltd

CITATION [2013] FCA913

Heard, as administrator of Mondello Farms Pty Ltd, sought an order under s442C(2)(c) of the Corporations Act allowing disposal of a potato washing and cooling line and other property subject to security interests.

The court, after satisfying itself that arrangements had been made to pay out or otherwise protect the interests of the known secured parties, granted the order. The terms of the order included a provision that on disposal, any security interest within the meaning of the PPSA would be extinguished and the purchaser would take the property free of it.

While this is an unexceptional outcome –s442C(7) expressly provides that a disposal permitted under s442C will extinguish the security interests – it is a reminder that part 2.5 of the PPSA is not a complete code of the circumstances in which a purchaser will take free of security interests.

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.