PPSA and a receiver’s equitable lien over third party property

Implications for bailment, consignment and retention of title creditors with a PMSI

In Re Arcabi Pty Ltd (Receivers & Managers Appointed) (in liq) [2014] WASC 310 a receiver who had been appointed by a bank under its security interest carried out extensive enquiries to ascertain whether goods held by the company were subject to any security interest under the Personal Property Securities Act 2009 (Cth) (PPSA).

The Supreme Court of Western Australia held the receiver had a right of indemnity and equitable lien over the property owned by third parties even though the property was not subject to the bank's security interest.

The company carried on the business of storage and sale of rare coins. Goods owned by the company were stored in a similar manner as other goods that were held by the company on bailment and consignment.