CITATION  FCA 392
JUDGE/S EDELMAN J
FPJ Group Pty Ltd bought goods on retention of title terms from CSR. The liquidators of FPJ claimed payments made to CSR for the goods were unfair preferences ‘in respect of an unsecured debt’: Corporations Act, s588FA.
The retention of title agreement arose before commencement of the PPSA, and so was a transitional security interest. ‘Security interest’ is defined in the Corporations Act as (a) a security interest to which the PPSA applies, other than a transitional security interest, or (b) a charge, lien or pledge.
The court held that even in pre-PPSA circumstances, a debt secured by retention of title was not ‘unsecured’: that is, for s588FA purposes, a retention of title clause operated as security. The court considered ‘unsecured’ did not take its meaning from ‘security interest’ (if it had, the retention of title could not have been security, as it was a transitional security interest and not a charge pledge or lien), but considered its conclusion was ‘consistent’ with the definition.
The court’s position is the opposite of that reached by the Victorian Supreme Court in Blakeley v Yamaha Music Australia Pty Ltd  VSC 231 a week later.
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.