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The decision in the Forge Group case is upheld

PPSA Law News | February 2017

Our readers will recall our review of the case of Forge Group Power Pty Limited [in liquidation] v. General Electric International Inc & Ors [2016] 305 FLR 101 in our previous News issues. In that case GE leased four mobile gas turbines generator sets (turbines) to Forge for a fixed term. The lease term was for longer than 12 months and therefore became a “PPS Lease” under s.13 of the PPSA and subject to the requirements of the PPSA. GE did not register their security interest in the turbines (claimed to be worth in the vicinity of $17 million). The turbines were not fixed to the land and the Court dismissed the claims by GE that the turbines were excluded from the PPSA because they were “fixtures”.

Court of Appeal upheld the decision of the Supreme Court in confirming that the common law notions of what is a “fixture” on the land apply to the PPSA and this case the turbines were not fixtures as they could be mobilised. Therefore the turbines were not excluded from the requirements of the PPSA and were required to be registered on the PPSR if they were to be the subject of secured interests of GE.

This Appeal confirms the need to ensure the step of registration on the PPSR of security interests is taken to secure the interest of owners of property in the event that the owner loses possession under a “PPS Lease” or otherwise.

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