In Esposito v The Wilderness Society Inc [2010] TASSC 21 the Supreme Court of Tasmania made declarations that the Wilderness Society’s 2009 AGM and the re-appointment of the Management Committee and changes to the Constitution were invalid.

In respect of the proposed amendment of the constitution, the Notice of AGM failed to satisfy the requirement that it specify the nature of the business to be transacted at the meeting and give details of the proposed constitution change. In addition, the meeting was invalid as the Notice was not placed on all notice boards as required by the constitution.

The Constitution required the notice be advertised in a Tasmanian newspaper and be displayed on the notice board situated within all premises operated by the Association. In fact notice was published in a newspaper in Burnie in north west Tasmania and it was not displayed in at least 5 locations. In 1 location the notice was attached to an Annual Review document and was concealed by that document so as not to be visible to anybody looking at the notice board.

The purported annual general meeting of the Society on 5 November 2009 was held without the knowledge of a group of the dissatisfied members and Judge Evans said “The subterfuge in relation to the meeting of 5 November 2009 was blatant to the point of dishonesty”.

The purported amendment to the Constitution increased the number of members of the Society that could require that a general meeting be held from 20 members to 10 per cent of its membership. Had this amendment been valid, it would have increased the number of members that could call a general meeting from 20 to more than 4,500. The Society has about 46,000 members.

In the circumstances the Judge ordered that the Society pay all of the plaintiff’s legal costs.

In assessing the impact of the Personal Property Securities Act you need to understand which of the securities you currently register will be registered in the Personal Property Securities Register and what security interests that are currently unregistered will need to be registered after May 2011 if you wish to maintain priority against competing interests.

What registers will be migrated to the PPS Register?

If you have a security registered on the following registers as at the commencement date (scheduled for May 2011) they will be migrated to the PPS Register and thereafter you will not be able to register new security interests on these registers:

Commonwealth
• Australian Register of Ships
• ASIC – Register of Company Charges (including provisional charges)
• Fisheries Register

New South Wales
• Register of Encumbered Vehicles (REVS NSW)
• Security Interest of Goods Register
• Registers of charges for co-operatives and co-operative housing societies

Queensland
• Register of Encumbered Vehicles (REVS Qld)
• Register of Security Interests and Liens
• Register of Co-operative Charges

South Australia
• Vehicle Securities Register
• Bills of Sale Register, Stock Mortgages and Wool Liens Register and the Liens on Fruit Register
• Register of Co-operative Charges

Tasmania
• Register of Bills of Sale, Stock, Wool and Crop Mortgages and Co-operative Charges
• Register of Vehicle Security Interests

Victoria
• Vehicle Securities Register
• Register of Liens on Crops and Liens on Wool and Stock Mortgages
• Register of Co-operative Charges

Western Australia
• Register of Encumbered Vehicles (REVS WA)
• Bills of Sale Register

Australian Capital Territory
• Register of Encumbered Vehicles (REVS ACT)
• General Register of Deeds and Instruments
• Register of Co-operative Charges

Northern Territory
• Register of Interests in Motor Vehicles and Other Goods
• Bill of Sale, Stock Mortgages and General Register
• Register of Co-operative Charges

You will have 2 years to check that in fact all of your existing securities have been migrated to the new PPS Register.

New securities from May 2011 that would previously have been registered on these securities will have to be registered on the PPS Register.

What security interests that are not currently registered should be registered?
There are a number of new registrable security interests but the one of particular relevance to ADI’s will be a security over a debtor’s deposit with the ADI.

While section 8(1)(d) of the Act excludes any right of set-off or right of combination of accounts from the application of the Act, section 12(4) (meaning of security interest) states that an ADI may take a security interest in an ADI account that is kept with the ADI.

Failure to register the security interest may result in loss of priority in the account as against a competing creditor or an obligation to account to a trustee for the depositor in the event of his insolvency.

Future notes on our Personal Property Securities site will discuss other registrable security interests, registration requirements and enforcement procedures.