Alert

Who does this affect?

All entities that hold or have granted registrable charges.

What do you need to do?

Consider the impact of the outcome of the appeal. A more detailed analysis wil be issued shortly.

Authors
Martin James  
Partner

Nuncio D'Angelo  
Partner

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Martin James  
Partner
T +61 2 9296 2198

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Nuncio D'Angelo  
Partner
T +61 2 9296 2457

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Melbourne
Hal Bolitho  
Ian Paterson  

Perth
Nicholas Creed  

Brisbane
Aaron Bourke  

Hong Kong
Richard Mazzochi  (馬紹基)

Beijing
David Olsson  (沈文)

London
Rowan Russell  

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The Queensland Court of Appeal has found for Fortress in the appeal from the decision of McMurdo J in Re Octaviar Ltd; Re Octaviar Administration Pty Ltd [2009] QSC 37, thus overturning the decision at first instance.

The appeal court found that the deed of 22 January 2008 which brought additional obligations within the scope of the existing charge constituted neither a variation of that charge nor the creation of a new charge.

A full report and analysis will follow.

Readers will be aware from our Client Alert of 10 March 2009 and the Table of Solutions we published in early May 2009 that the first instance decision caused widespread concern in the market. It raised questions about what, precisely, constitutes the terms of a charge, what will comprise a registrable amendment to a charge and even what is required to be lodged on initial registration of a charge.

The decision was widely regarded as cutting across decades of generally accepted practice (by lenders and borrowers, as well as ASIC itself) in relation to these matters. A significant amount of energy and resources has been expended by many in the market since March to try to ameliorate the perceived effects of the decision in relation to historical matters, and to accommodate it in new transactions.