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

(2018) 53 WAR 325; [2018] WASCA 163

Western Australia Court of Appeal

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Interrogate

Catchwords

1. Corporations
2. › Insolvency
3. › Set-off
4. › Statutory set-off under s 553C
5. › Mutuality
6. › Whether creation of security interest under general security agreement destroys mutuality
7. › Whether chargor retains beneficial interest in charged property where floating charge has not crystallised
8. › Corporations Act 2001 (Cth), s 553C
1. Corporations
2. › Insolvency
3. › Set-off
4. › Whether s 553C is exclusive code
5. › Whether s 553C operates to exclusion of contractual and equitable rights of set-off
6. › Pari passu principle
7. › Corporations Act 2001 (Cth), s 553C
1. Personal Property Securities
2. › Transfer of account
3. › Rights of account debtor against transferee
4. › Whether s 80(1)(a) applies to assignments by way of security or only outright assignments
5. › Whether bank's security interest subject to contractual defences and set-off rights of account debtor
6. › Personal Property Securities Act 2009 (Cth), ss 12, 80
1. Personal Property Securities
2. › Account
3. › Definition
4. › Whether claim for wrongful call on performance securities under building contract is an 'account'
5. › Personal Property Securities Act 2009 (Cth), s 10

Quick Take

Practitioners advising secured creditors and account debtors should note that a security interest in the nature of a floating charge over a debtor's receivables does not destroy mutuality for insolvency set-off purposes under s 553C, and that s 80(1)(a) of the PPSA preserves the account debtor's defences and set-off rights against the secured party as transferee.