Power Rental Op Co Australia, LLC V Forge Group Power Pty Ltd

CITATION [2017] NSWSC 8
JUDGE/S BATHUST CJ, BEAZLEY P AND WARD JA

GE leased turbines to Forge, and GE failed to perfect its interest by making a registration under the PPSA. Power Rental later replaced GE as lessor. Forge went into voluntary administration, then liquidation.

At first instance the court held that the lease vested in Forge on administration under s267, and so it acquired title to the turbines: Forge Group Power Pty Limited v General Electric International Inc [2016] NSWSC 52.

Power Rental (in GE’s place) appealed, arguing that the turbines were ‘fixtures’ and so outside the scope of the PPSA.

The court rejected the appeal, holding that:

  • the first instance decision was correct in holding that the definition of ‘fixtures’ in the PPSA aligned with the common law meaning of ‘fixtures’, requiring a determination of both the degree of annexation of an item to the land, and the purpose of annexation; and
  • the first instance decision also correctly applied the common law test, finding that the turbines were not fixtures.

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.