Relux Commercial Pty Ltd V Doka Formwork Pty Ltd

CITATION [2014] VSC 570
JUDGE/S SIFRIS J

Doka leased formwork equipment to Relux for an indefinite period, continuing until the equipment was returned. Some of the leases commenced more than 20 business days before registration occurred. Relux went into liquidation, and the liquidators sought a declaration that vesting had occurred under s588 FL of the Corporations Act. Doka agreed to abide by the outcome of the proceedings but did not significantly participate.

The court held that the leases were PPS leases and those that commenced outside the 20 business day period vested in Relux.

The court examined each step of attachment, enforceability and perfection. For purposes of attachment, the court held that Doka gave ‘value’ when it gave the equipment to Relux, and further that Relux ‘performed an act giving rise to the lease’ by accepting and retaining possession of the equipment.

The relevant security agreements were constituted by orders placed by Relux, and invoices issued by Doka with terms and conditions printed on the back. The court held that the order forms constituted writing signed by the grantor (Relux), or alternatively that Relux had accepted the security agreement by its conduct of taking delivery of, using and retaining the equipment.

(Comment: although the court found two methods of satisfying the requirement for a security agreement, the case may serve as an example of printed invoice terms being acceptable to satisfy the requirement, even where nothing has been signed by the grantor).


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.