Octaviar Decision Overturned On Appeal

The Queensland Court of Appeal today unanimously upheld the appeal against the decision in re Octaviar Limited; re Octaviar Administration Pty Ltd [2009] QCS37 (Octaviar).

In the Octaviar decision, the court had found that where a charge was drafted so as to secure all money, obligations and liabilities owing by the chargor to the lender under, or in relation to, a Transaction Document and an additional document was subsequently specified as a "Transaction Document", that constituted a variation of the terms of the charge. According to s268(2) of the Corporations Act 2001, a notice of the variation would then have to be lodged with ASIC within the applicable timeframe.

The Octaviar decision caused considerable consternation throughout the banking and legal communities because it was contrary to accepted banking practice.