Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in Liquidation) (Receivers and Managers Appointed)

(2017) 52 WAR 90; [2017] WASC 152

Supreme Court of Western Australia

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Interrogate

Catchwords

1. Corporations
2. › Insolvency
3. › Winding up
4. › Set-off in insolvency
5. › Whether s 553C of the Corporations Act is an exclusive code displacing contractual and equitable set-off
6. › Whether mutuality of interest destroyed by PPSA security interest
7. › Corporations Act 2001 (Cth), s 553C
1. Personal Property Securities
2. › Security interests
3. › Nature of PPSA security interest
4. › Whether attachment under s 19 creates proprietary interest
5. › Whether concepts of fixed and floating charges and crystallisation remain relevant under PPSA
6. › Personal Property Securities Act 2009 (Cth), ss 19, 18, 31, 32
1. Personal Property Securities
2. › Rights of account debtors
3. › Whether s 80(1) of the PPSA preserves set-off rights against secured creditor
4. › Whether inconsistency between PPSA s 80(1) and Corporations Act s 553C
5. › Personal Property Securities Act 2009 (Cth), ss 80, 258
1. Contract
2. › Construction
3. › Set-off clauses in construction contracts
4. › Whether contractual provision operates as netting-off or set-off
5. › Whether amounts become 'due' before or after exercise of set-off right

Quick Take

A PPSA security interest that has attached to a debtor's claims under s 19 of the PPSA creates a proprietary interest that destroys mutuality of interest for the purposes of insolvency set-off under s 553C of the Corporations Act. Section 553C is an exclusive code displacing contractual and equitable set-off in insolvency. The concepts of crystallisation and the distinction between fixed and floating charges are no longer relevant under the PPSA regime. Section 80(1) of the PPSA preserves account debtor set-off rights against secured creditors outside insolvency, but does not override s 553C in insolvency because s 258 of the PPSA resolves the inconsistency in favour of the Corporations Act.