Pluton Resources Ltd

CITATION [2017] WASC 142

Under a Deed of Company Arrangement for Pluton, a fund had been created to be applied for specified purposes. On termination of the DOCA, some of the fund remained. Pluton had granted security over all its assets to General Nice Recursos Comercial Offshore De Macau Limitada, which appointed receivers. GNR’s receivers argued that the fund was subject to the security interest.

The court held, relying on Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2014] VSCA 326 (where the court held that a security interest arising by deposit of funds into court arose under general law, and so under s8(1)(c) the PPSA did not apply), that the fund arose by operation of law and not by a consensual transaction, and so GNR’s security interest did not apply to it.

This decision was overturned in Hughes v Pluton Resources Ltd [2017] WASCA 213.

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.