Document ID: chunk:federal_register_of_legislation:C2025C00185:section:588fp:p1
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 588FP (pt 1/2)
Character Range: 2030080–2032702

588FP  Security interests in favour of an officer of a company etc. void

General rule
 (1) A security interest, and any powers purporting to be conferred by the instrument under which the security interest is created, are void, and are taken always to have been void, if:
 (a) a company grants the security interest; and
 (b) a person covered by subsection (2) is a secured party; and
 (c) the secured party purports to take a step to enforce the security interest, within 6 months after the time (the relevant time) the instrument is made, without the leave of the Court under subsection (4).
 (2) This subsection covers the following persons:
 (a) a person who is an officer (including a local agent of a foreign company) of the company at the relevant time;
 (b) a person who has been such an officer of the company at any time within the period of 6 months ending at the relevant time;
 (c) a person associated, in relation to the creation of the security interest, with a person of a kind mentioned in paragraph (a) or (b).
 (3) Without limiting paragraph (1)(c), a secured party takes a step to enforce a security interest if:
 (a) the secured party appoints a receiver, or a receiver and manager, under powers conferred by an instrument creating or evidencing the security interest; or
 (b) whether directly or by an agent, the secured party enters into possession or assumes control of property of a company for the purposes of enforcing the security interest; or
 (c) the secured party seizes the property under section 123 of the Personal Property Securities Act 2009 for the purposes of enforcing the security interest.

Extension of time on application to the Court
 (4) On application by a secured party, the Court may give leave for a security interest granted by a company to be enforced by the secured party within 6 months after the relevant time, if it is satisfied that:
 (a) the company was solvent immediately before the relevant time; and
 (b) in all the circumstances of the case, it is just and equitable for the Court to do so.

Exception for security interests in PPSA retention of title property
 (5) This section does not apply in relation to a PPSA security interest in PPSA retention of title property.

Effect on debts, liabilities, obligations and title
 (6) A debt, liability or obligation is not affected by the fact that the security interest securing the debt, liability or obligation is void under subsection (1).
 (7) Subsection (1) does not affect the title of a person to property if:
 (a) the person acquires the property for new value (within the meaning of the Personal Property