A charge may be rectified after the debtor has been placed in liquidation or administration

In Saraceni v Mentha [No.2] [2012] WASC 336 a director sought to challenge the appointment of receivers to Westgem Investments Pty Ltd ("Westgem") under a fixed and floating charge ("the Charge"). In 2008 Westgem entered into a Facility Agreement with financiers and executed the Charge, which charged the "secured property".

The plaintiff contended that:

• because there was no definition of "the secured property" in the Charge, the definition given to that term in the Facility Agreement ought to be imported into the Charge, and
• therefore the Charge did not secure anything, because the definition in the Facility Agreement referred to assets mortgaged, charged, or otherwise secured at the time the arrangements were entered into and at that time none of Westgem's assets had been so secured.