The transition period to register security interests expired on 31 January. Guardian’s Heather Blanco said that failure to register assets can result in “interests” becoming available to all unsecured creditors in the event of business liquidation.
Heather said “the legislation has been effected with little education or information provided to the business community.” “Some businesses have already been caught out”, she said.
In 2010, Queensland Excavation Services purchased equipment using third-party finance.
It then leased the equipment to Maiden Civil, which used the equipment in civil construction work in the Northern Territory. Maiden made repayments to QES but in 2012, Maiden borrowed money from Fast Financial Solutions, granting Fast a security interest over all its assets and equipment. Four months later, Fast appointed receivers to Maiden, who claimed possession of the equipment Maiden was leasing from QES.
QES had never registered its interest in the equipment, and took its case to the High Court where the decision went against it.
To learn more about business insurance contact Heather at Guardian.