Corporations Act 2001

Ch 2K (comprising s 261 to 282) repealed by No 96 of 2010, s 3, Sch 1, Pt 2 [ 18] (effective 30 January 2012). For transitional provisions, see s 1502 to 1506 . Ch 2K formerly read:

CHAPTER 2K - CHARGES

PART 2K.1 - PRELIMINARY

SECTION 261 INTERPRETATION AND APPLICATION  
261(1)
In this Chapter, unless the contrary intention appears:

document of title
means a document:

(a) used in the ordinary course of business as proof of possession or control, or of the right to possession or control, of property other than land; or

(b) authorising or purporting to authorise, whether by endorsement or delivery, the possessor of the document to transfer or receive property other than land;

and includes:

(c) a bill of lading; and

(d) a warehousekeeper ' s certificate; and

(e) a wharfinger ' s certificate; and

(f) a warrant or order for the delivery of goods; and

(g) a document that is, or evidences title to, a marketable security.

present liability
, in relation to a charge, means a liability that has arisen, being a liability the extent or amount of which is fixed or capable of being ascertained, whether or not the liability is immediately due to be met.

property :

(a) of a company - means property that is held by the company (whether or not as trustee) wherever the property is situated (whether in Australia or elsewhere); or

(b) of a foreign company - means property that is held by the company (whether or not as trustee) and that is in this jurisdiction or in an external Territory; or

(c) of a registrable Australian body - means property that is held by the body (whether or not as trustee) and that is in this jurisdiction and outside the body ' s place of origin.

prospective liability
, in relation to a charge, means any liability that may arise in the future, or any other liability, but does not include a present liability.

Register
means the Australian Register of Company Charges referred to in section 265.

registrable charge
means a charge in relation to which, by virtue of section 262, the provisions of this Chapter mentioned in subsection 262(1) apply.

261(2)
A charge referred to in subsection 263(3) or section 264 is, until the charge is registered, treated for the purposes of this Chapter as if it were not a registrable charge but, when the charge is so registered, it has the priority accorded to a registered charge as from the time of registration.

261(3)
The registration of a charge referred to in subsection 263(3) or section 264 does not prejudice any priority that would have been accorded to the charge under any other law (whether an Australian law or not) if the charge had not been registered.

261(4)
For the purposes of this Chapter, a notice or other document is taken to be lodged when it is received at an office of ASIC in this jurisdiction by an officer authorised to receive it.

PART 2K.2 - REGISTRATION

SECTION 262 CHARGES REQUIRED TO BE REGISTERED  
262(1)
Subject to this section, the provisions of this Chapter relating to the giving of notice in relation to, the registration of, and the priorities of, charges apply in relation to the following charges (whether legal or equitable) on property of a company and do not apply in relation to any other charges:

(a) a floating charge on the whole or a part of the property, business or undertaking of the company;

(b) a charge on uncalled share capital;

(c) a charge on a call on shares made but not paid;

(d) a charge on a personal chattel, including a personal chattel that is unascertained or is to be acquired in the future, but not including a ship registered in an official register kept under an Australian law relating to title to ships;

(e) a charge on goodwill, on a patent or licence under a patent, on a trade mark or service mark or a licence to use a trade mark or service mark, on a copyright or a licence under a copyright or on a registered design or a licence to use a registered design;

(f) a charge on a book debt;

(g) a charge on a marketable security, not being:

(i) a charge created in whole or in part by the deposit of a document of title to the marketable security; or

(ii) a mortgage under which the marketable security is registered in the name of the chargee or a person nominated by the chargee; or

(iii) a charge where there is an agreement in force under which the chargee (or a person who has agreed to act on the instructions of the chargee) controls the sending of some or all electronic messages or other electronic communications by which the marketable security could be transferred;

(h) a lien or charge on a crop, a lien or charge on wool or a stock mortgage;

[ CCH Note: There is no paragraph 262(1)(i).]

(j) a charge on a negotiable instrument other than a marketable security.

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S 262(1) amended by No 24 of 2003, s 3, Sch 5 [ 8] (effective 11 April 2003).

262(2)
The provisions of this Chapter mentioned in subsection (1) do not apply in relation to:

(a) a charge, or a lien over property, arising by operation of law; or

(b) a pledge of a personal chattel or of a marketable security; or

(c) a charge created in relation to a negotiable instrument or a document of title to goods, being a charge by way of pledge, deposit, letter of hypothecation or trust receipt; or

(d) a transfer of goods in the ordinary course of the practice of any profession or the carrying on of any trade or business; or

(e) a dealing, in the ordinary course of the practice of any profession or the carrying on of any trade or business, in respect of goods outside Australia.

262(3)
The reference in paragraph (1)(d) to a charge on a personal chattel is a reference to a charge on any article capable of complete transfer by delivery, whether at the time of the creation of the charge or at some later time, and includes a reference to a charge on a fixture or a growing crop that is charged separately from the land to which it is affixed or on which it is growing, but does not include a reference to a charge on:

(a) a document evidencing title to land; or

(b) a chattel interest in land; or

(c) a marketable security; or

(d) a document evidencing a thing in action; or

(e) stock or produce on a farm or land that by virtue of a covenant or agreement ought not to be removed from the farm or land where the stock or produce is at the time of the creation of the charge.

262(4)
The reference in paragraph (1)(f) to a charge on a book debt is a reference to a charge on a debt due or to become due to the company at some future time on account of or in connection with a profession, trade or business carried on by the company, whether entered in a book or not, and includes a reference to a charge on a future debt of the same nature although not incurred or owing at the time of the creation of the charge, but does not include a reference to a charge on a marketable security, on a negotiable instrument or on a debt owing in respect of a mortgage, charge or lease of land.

262(5)
The reference in paragraph (1)(h) to a lien or charge on a crop, a lien or charge on wool or a stock mortgage includes a reference to a security (however described) that is registrable under a prescribed law of a State or Territory.

262(6)
For the purposes of this section, a company is taken to have deposited a document of title to property with another person (in this subsection referred to as the chargee ) in a case where the document of title is not in the possession of the company if:

(a) the person who holds the document of title acknowledges in writing that the person holds the document of title on behalf of the chargee; or

(b) a government, an authority or a body corporate that proposes to issue a document of title in relation to the property agrees, in writing, to deliver the document of title, when issued, to the chargee.

262(7)
For the purposes of this section, a charge is taken to be a charge on property of a kind to which a particular paragraph of subsection (1) applies even though the instrument of charge also charges other property of the company including other property that is of a kind to which none of the paragraphs of that subsection applies.

262(8)
The provisions of this Chapter mentioned in subsection (1) do not apply in relation to a charge on land.

262(9)
The provisions of this Chapter mentioned in subsection (1) do not apply in relation to a charge on fixtures given by a charge on the land to which they are affixed.

262(10)
The provisions of this Chapter mentioned in subsection (1) do not apply in relation to a charge created by a company in its capacity as legal personal representative of a deceased person or as trustee of the estate of a deceased person.

262(11)
A charge on property of a company is not invalid merely because of the failure to lodge with ASIC, or give to the company or another person, a notice or other document that is required by this Part to be so lodged or given.
SECTION 263 LODGMENT OF NOTICE OF CHARGE AND COPY OF INSTRUMENT  
263(1)
Where a company creates a charge, the company must ensure that there is lodged, within 45 days after the creation of the charge:

(a) a notice in the prescribed form setting out the following particulars:

(i) the name of the company and the date of the creation of the charge;

(ii) whether the charge is a fixed charge, a floating charge or both a fixed and floating charge;

(iii) if the charge is a floating charge - whether there is any provision in the resolution or instrument creating or evidencing the charge that prohibits or restricts the creation of subsequent charges;

(iv) a short description of the liability (whether present or prospective) secured by the charge;

(v) a short description of the property charged;

(vi) whether the charge is created or evidenced by a resolution, by an instrument or by a deposit or other conduct;

(vii) if the charge is constituted by the issue of a debenture or debentures - the name of the trustee (if any) for debenture holders;

(viii) if the charge is not constituted by the issue of a debenture or debentures or there is no trustee for debenture holders - the name of the chargee;

(ix) such other information as is prescribed; and

(b) if, pursuant to a resolution or resolutions passed by the company, the company issues a series of debentures constituting a charge to the benefit of which all the holders of debentures in the series are entitled in equal priority, and the charge is evidenced only by the resolution or resolutions and the debentures - a copy of the resolution or of each of the resolutions verified by a statement in writing to be a true copy, and a copy of the first debenture issued in the series and a statement in writing verifying the execution of that first debenture; and

(c) if, in a case to which paragraph (b) does not apply, the charge was created or evidenced by an instrument or instruments:

(i) the instrument or each of the instruments; or

(ii) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy, and a statement in writing verifying the execution of the instrument or of each of the instruments.

263(2)
In a case to which paragraph (1)(b) applies:

(a) the charge is, for the purposes of subsection (1), taken to be created when the first debenture in the series of debentures is issued; and

(b) if, after the issue of the first debenture in the series, the company passes a further resolution authorising the issue of debentures in the series, the company must ensure that a copy of that resolution, verified by a statement in writing to be a true copy of that resolution, is lodged within 45 days after the passing of that resolution.

263(3)
A body that applies for registration as a company under Part 5B.1, or for registration under Part 5B.2, must lodge with the application for registration the documents specified in subsection (4) in relation to any charge on property of the body that would be registrable under this Part if the body were already registered under Part 5B.1, or Part 5B.2, as the case may be.

263(4)
The documents required to be lodged under subsection (3) in relation to a charge on property of a body are the following documents:

(a) a notice in the prescribed form:

(i) setting out the name of the body; and

(ii) if the charge was created by the body - specifying the date of the creation of the charge; and

(iii) if the charge was a charge existing on property acquired by the body - setting out the date on which the property was so acquired; and

(iv) otherwise complying with the requirements of paragraph (1)(a);

(b) if the charge was created or evidenced as mentioned in paragraph (1)(b):

(i) in the case of a charge created by the body - a copy of the resolution or of each of the resolutions referred to in that paragraph verified by a statement in writing to be a true copy and a copy of the first debenture issued in the series referred to in that paragraph and a statement in writing verifying the execution of that first debenture; or

(ii) in the case of a charge that existed on property acquired by the body - the copies referred to in subparagraph (i) verified by statements in writing to be true copies;

(c) if the charge was created or evidenced by an instrument or instruments (otherwise than as mentioned in paragraph (1)(b)):

(i) in the case of a charge created by the body:

(A) the instrument or each of the instruments; or

(B) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy, and a statement in writing verifying the execution of the instrument or of each of the instruments; or

(ii) in the case of a charge that existed on property acquired by the body - a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy;

(d) if the charge was created or evidenced as mentioned in paragraph (1)(b) and, after the issue of the first debenture in the series, the body passed a further resolution or resolutions authorising the issue of debentures in the series - a copy of that resolution or of each of those resolutions verified by a statement in writing to be a true copy.

263(5)
A notice in relation to a charge, being a charge in relation to which paragraph (1)(b) or (c) or (4)(b) or (c) applies, is not taken to have been lodged under subsection (1) or (3) unless the notice is accompanied by the documents specified in that paragraph.

263(6)
Where a notice with respect to an instrument creating a charge has been lodged under subsection (1) or (3), being a charge in respect of an issue of several debentures the holders of which are entitled under the instrument in equal priority to the benefit of the charge, sections 279 to 282 (inclusive) have effect as if any charges constituted by those debentures were registered at the time when the charge to which the notice relates was registered.

263(7)
Where a payment or discount has been made or allowed, either directly or indirectly, by a company or registrable body to a person in consideration of the person ' s subscribing or agreeing to subscribe, whether absolutely or conditionally, for debentures, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for debentures, the notice required to be lodged under subsection (1) or (3) must include particulars as to the amount or rate per centum of the payment or discount.

263(8)
Where a company or registrable body issues debentures as security for a debt of the company or registrable body, the company or registrable body is not thereby to be regarded, for the purposes of subsection (7), as having allowed a discount in respect of the debentures.
SECTION 264 ACQUISITION OF PROPERTY SUBJECT TO CHARGE  
264(1)
Where a company acquires property that is subject to a charge, being a charge that would have been registrable when it was created if it had been created by a company, the company must, within 45 days after the acquisition of the property:

(a) ensure that there is lodged:

(i) a notice in the prescribed form in relation to the charge, setting out the name of the company and the date on which the property was so acquired and otherwise complying with the requirements of paragraph 263(1)(a) ; and

(ii) if the charge was created or evidenced as mentioned in paragraph 263(1)(b) - a copy of the resolution or of each of the resolutions referred to in that paragraph verified by a statement in writing to be a true copy and a copy of the first debenture issued in the series referred to in that paragraph verified by a statement in writing to be a true copy; and

(iii) if the charge was created or evidenced by an instrument or instruments (otherwise than as mentioned in paragraph 263(1)(b) ):

(A) the instrument or each of the instruments; or

(B) a copy of the instrument or of each of the instruments verified by a statement in writing to be a true copy; and

(b) give to the chargee notice that it has acquired the property and the date on which it was so acquired.

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S 264(1) amended by No 101 of 2007, s 3, Sch 1 [ 207] (effective 1 September 2007).

264(2)
A notice in relation to a charge, being a charge in relation to which subparagraph (1)(a)(ii) or (iii) applies, is not taken to have been lodged under subsection (1) unless it is accompanied by the documents specified in that subparagraph.
SECTION 265 REGISTRATION OF DOCUMENTS RELATING TO CHARGES  
265(1)
ASIC must keep a register to be known as the Australian Register of Company Charges.

265(2)
Where a notice in respect of a charge on property of a company that is required by section 263 or 264 to be lodged is lodged (whether during or after the period within which the notice was required to be lodged) and the notice contains all the particulars required by the relevant section to be included in the notice, ASIC must as soon as practicable cause to be entered in the Register the time and date when the notice was lodged and the following particulars in relation to the charge:

(a) if the charge is a charge created by the company, the date of its creation or, if the charge was a charge existing on property acquired by the company, the date on which the property was so acquired;

(b) a short description of the liability (whether present or prospective) secured by the charge;

(c) a short description of the property charged;

(d) the name of the trustee for debenture holders or, if there is no such trustee, the name of the chargee.

265(3)
Subject to subsection (9), where particulars in respect of a charge are entered in the Register in accordance with subsection (2), the charge is taken to be registered, and to have been registered from and including the time and date entered in the Register under that subsection.

265(4)
Where:

(a) a notice in respect of a charge on property of a company is lodged under section 263 or 264 (whether during or after the period within which the notice was required to be lodged); and

(b) the notice is not accompanied by a certificate to the effect that all documents accompanying the notice have been duly stamped as required by any applicable law relating to stamp duty;

ASIC must cause to be entered in the Register the time and date when the notice was lodged and the particulars referred to in paragraphs (2)(a), (b), (c) and (d), but must cause the word " provisional " to be entered in the Register in relation to the entry specifying that time and date.

265(5)
Where:

(a) in accordance with subsection (4), the word " provisional " is entered in the Register in relation to an entry specifying the time and date on which a notice in respect of a charge was lodged; and

(b) within a period of 30 days or such longer period as is prescribed after the notice was lodged, or within such further period as ASIC, if it considers it to be appropriate in a particular case, allows, a certificate to the effect set out in paragraph (4)(b) has been produced to ASIC;

ASIC must delete the word " provisional " that was so entered in relation to the entry relating to that charge, but if such a certificate is not produced within the period, or the further period, referred to in paragraph (b), ASIC must delete from the Register all the particulars that were entered in relation to the charge.

265(6)
Where a document that purports to be a notice in respect of a charge on property of a company for the purposes of section 263 or 264 is lodged (whether during or after the period within which the notice was required to be lodged) and the document contains the name of the company concerned and the particulars referred to in subparagraph 263(1)(a)(vii) or (viii), as the case requires, but does not contain some or all of the other particulars that are required to be included in the notice or is otherwise defective:

(a) ASIC must cause to be entered in the Register the time and date when the document was lodged and such of the particulars referred to in paragraphs (2)(a), (b), (c) and (d) as are ascertainable from the document, but must cause the word " provisional " to be entered in the Register in relation to the entry specifying that time and date; and

(b) ASIC must, by notice in writing to the person who lodged the document, direct the person to ensure that there is lodged, on or before the day specified in the notice, a notice in relation to the charge that complies with the requirements of section 263 or 264, as the case may be, but the giving by ASIC of a direction to the person under this paragraph does not affect any liability that the company may have incurred or may incur by reason of a contravention of section 263 or 264.

265(7)
Where ASIC gives a direction to a person under paragraph (6)(b) in relation to a charge:

(a) if the direction is complied with on or before the day specified in the notice containing the direction, ASIC must:

(i) delete from the Register the word " provisional " that was inserted pursuant to paragraph (6)(a); and

(ii) cause to be entered in the Register in relation to the charge any particulars referred to in subsection (2) that have not previously been entered; and

(b) if the direction is not complied with on or before that day - ASIC must delete from the Register all the particulars that were entered in relation to the charge; and

(c) if the direction is complied with after that day - ASIC must cause to be entered in the Register in relation to the charge the time at which and day on which the direction was complied with and the particulars referred to in paragraphs (2)(a), (b), (c) and (d).

265(8)
ASIC may enter in the Register in relation to a charge, in addition to the particulars expressly required by this section to be entered, such other particulars as ASIC thinks fit.

265(9)
If the word " provisional " is entered in the Register in relation to an entry specifying a time and day in relation to a charge, the charge is taken not to have been registered but:

(a) where the word " provisional " is deleted from the Register pursuant to subsection (5) or paragraph (7)(a) - the charge is taken to be registered and to have been registered from and including the time and day specified in the Register pursuant to subsection (4) or paragraph (6)(a), as the case may be; or

(b) where the particulars in relation to the charge are deleted from the Register pursuant to paragraph (7)(b) and those particulars and a time and day are subsequently entered in the Register in relation to the charge pursuant to paragraph (7)(c) - the charge is taken to be registered from and including that last-mentioned time and day.

265(10)
Where, pursuant to subsection 263(3), a registrable body lodges notices relating to 2 or more charges on the same property of the registrable body, the time and day that must be entered in the Register in relation to each of those charges are the time and day when the first notice was lodged.

265(11)
Where, in accordance with subsection (10), the time and day that are entered in the Register are the same in relation to 2 or more charges on property of a registrable body, those charges have, as between themselves, the respective priorities that they would have had if they had not been registered under this Part.

265(12)
Where, pursuant to section 264, a company lodges notices relating to 2 or more charges on the same property acquired by the company (being charges that are not already registered under this Part), the time and day that must be entered in the Register in relation to each of those charges are the time and day when the first notice was lodged.

265(13)
Where, in accordance with subsection (12), the time and day that are entered in the Register are the same in relation to 2 or more charges on property acquired by a company, those charges have, as between themselves, the respective priorities that they would have had if they had not been registered under this Part.

265(14)
Where a notice is lodged under section 268 (whether during or after the period within which it was required to be lodged), ASIC must as soon as practicable cause to be entered in the Register the time and day when the notice was so lodged and the particulars set out in the notice.
SECTION 265A STANDARD TIME FOR THE PURPOSES OF SECTION 265  
265A(1)
ASIC may, by Gazette notice, declare a specified standard time to be the standard time for the purposes of section 265.

265A(2)
Where a notice is in force under subsection (1) of this section, a reference in subsection 265(2) or (4), paragraph 265(6)(a) or (7)(c), or subsection 265(10), (12) or (14), to entering the time when a particular event happened is a reference to entering that time as expressed in terms of the standard time specified in the notice.
SECTION 266 CERTAIN CHARGES VOID AGAINST LIQUIDATOR OR ADMINISTRATOR  
266(1)
Where:

(a) an order is made, or a resolution is passed, for the winding up of a company; or

(b) an administrator of a company is appointed under section 436A, 436B or 436C; or

(ba) a company executes a deed of company arrangement;

a registrable charge on property of the company is void as a security on that property as against the liquidator, the administrator of the company, or the deed ' s administrator, as the case may be, unless:

(c) a notice in respect of the charge was lodged under section 263 or 264, as the case requires:

(i) within the relevant period; or

(ii) at least 6 months before the critical day; or

(d) in relation to a charge other than a charge to which subsection 263(3) applies - the period within which a notice in respect of the charge (other than a notice under section 268) is required to be lodged, being the period specified in the relevant section or that period as extended by the Court under subsection (4), has not ended at the start of the critical day and the notice is lodged before the end of that period; or

(e) in relation to a charge to which subsection 263(3) applies - the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1, or registered under Part 5B.2, has not ended at the start of the critical day and the notice is lodged before the end of that period; or

(f) in relation to a charge to which section 264 applies - the period of 45 days after the chargee becomes aware that the property charged has been acquired by a company has not ended at the start of the critical day and the notice is lodged before the end of that period.

266(2)
The reference in paragraph (1)(c) to the relevant period is to be construed as a reference to:

(a) in relation to a charge to which subsection 263(1) applies - the period of 45 days specified in that subsection, or that period as extended by the Court under subsection (4) of this section; or

(b) in relation to a charge to which subsection 263(3) applies - the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1 or registered under Part 5B.2; or

(c) in relation to a charge to which section 264 applies - the period of 45 days after the chargee becomes aware that the property has been acquired by a company.

266(3)
Where, after there has been a variation in the terms of a registrable charge on property of a company having the effect of increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge:

(a) an order is made, or a resolution is passed, for the winding up of the company; or

(b) an administrator of a company is appointed under section 436A, 436B or 436C; or

(ba) a company executes a deed of company arrangement;

the registrable charge is void as a security on that property to the extent that it secures the amount of the increase in that debt or liability unless:

(c) a notice in respect of the variation was lodged under section 268:

(i) within the period of 45 days specified in subsection 268(2) or that period as extended by the Court under subsection (4) of this section; or

(ii) not later than 6 months before the critical day; or

(d) the period of 45 days specified in subsection 268(2), or that period as extended by the Court under subsection (4) of this section, has not ended at the start of the critical day and the notice is lodged before the end of that period.

266(4)
The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Part:

(a) was accidental or due to inadvertence or some other sufficient cause; or

(b) is not of a nature to prejudice the position of creditors or shareholders;

or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order.

266(5)
Where:

(a) a registrable charge (in this subsection referred to as the later charge ) is created before the end of 45 days after the creation of an unregistered registrable charge (in this subsection referred to as the earlier charge ); and

(b) the later charge relates to all or any of the property to which the earlier charge related; and

(c) the later charge is given as a security for the same liability as is secured by the earlier charge or any part of that liability;

the later charge, to the extent to which it is a security for the same liability or part thereof, and so far as it relates to the property comprised in the earlier charge, is void as a security on that property as against a liquidator or administrator of the company, or an administrator of a deed of company arrangement executed by the company, even if a notice in respect of the later charge was lodged under section 263 within a period mentioned in paragraph (1)(c) or (d) of this section, unless it is proved to the satisfaction of the Court that the later charge was given in good faith for the purpose of correcting some material error in the earlier charge or under other proper circumstances and not for the purposes of avoiding or evading the provisions of this Part.

266(6)
Nothing in subsection (1) or (3) operates to affect the title of a person to property purchased for value from a chargee or from a receiver appointed by a chargee in the exercise of powers conferred by the charge or implied by law if that person purchased the property in good faith and without notice of:

(a) the filing of an application for an order for the winding up of the company; or

(b) the passing of a resolution for the voluntary winding up of the company; or

(c) an administrator of the company being appointed under section 436A, 436B or 436C; or

(d) the company executing a deed of company arrangement.

266(7)
The onus of proving that a person purchased property in good faith and without notice of any of the matters referred to in paragraphs (6)(a), (b), (c) and (d) is on the person asserting that the property was so purchased.

266(8)
In this section:

critical day
, in relation to a company, means:

(a) if the company is being wound up - the day when the winding up began; or

(b) if the company is under administration - the section 513C day in relation to the administration; or

(c) if the company has executed a deed of company arrangement - the section 513C day in relation to the administration that ended when the deed was executed.

SECTION 267 CHARGES IN FAVOUR OF CERTAIN PERSONS VOID IN CERTAIN CASES  
267(1)
Where:

(a) a company creates a charge on property of the company in favour of a person who is, or in favour of persons at least one of whom is, a relevant person in relation to the charge; and

(b) within 6 months after the creation of the charge, the chargee purports to take a step in the enforcement of the charge without the Court having, under subsection (3), given leave for the charge to be enforced;

the charge, and any powers purported to be conferred by an instrument creating or evidencing the charge, are, and are taken always to have been, void.

267(2)
Without limiting the generality of subsection (1), a person who:

(a) appoints a receiver of property of a company under powers conferred by an instrument creating or evidencing a charge created by the company; or

(b) whether directly or by an agent, enters into possession or assumes control of property of a company for the purposes of enforcing a charge created by the company;

is taken, for the purposes of subsection (1), to take a step in the enforcement of the charge.

267(3)
On application by the chargee under a charge, the Court may, if it is satisfied that:

(a) immediately after the creation of the charge, the company that created the charge was solvent; and

(b) in all the circumstances of the case, it is just and equitable for the Court to do so;

give leave for the charge to be enforced.

267(4)
Nothing in subsection (1) affects a debt, liability or obligation of a company that would, if that subsection had not been enacted, have been secured by a charge created by the company.

267(5)
Nothing in subsection (1) operates to affect the title of a person to property (other than the charge concerned or an interest in the charge concerned) purchased for value from a chargee under a charge, from an agent of a chargee under a charge, or from a receiver appointed by a chargee under a charge in the exercise of powers conferred by the charge or implied by law, if that person purchased the property in good faith and without notice that the charge was created in favour of a person who is, or in favour of persons at least one of whom is, as the case may be, a relevant person in relation to the charge.

267(6)
The onus of proving that a person purchased property in good faith and without notice that a charge was created as mentioned in subsection (5) is on the person asserting that the property was so purchased.

267(7)
In this section:

chargee
, in relation to a charge, means:

(a) in any case - the holder, or all or any of the holders, of the charge; or

(b) in the case of a charge that is an agreement to give or execute a charge in favour of a person or persons, whether upon demand or otherwise - that person, or all or any of those persons.

officer
, in relation to a company, includes, in the case of a registered foreign company, a local agent of the foreign company.

receiver
, includes a receiver and manager.

relevant person
, in relation to a charge created by a company, means:

(a) a person who is at the time when the charge is created, or who has been at any time during the period of 6 months ending at that time, an officer of the company; or

(b) a person associated, in relation to the creation of the charge, with a person of a kind referred to in paragraph (a).

SECTION 268 ASSIGNMENT AND VARIATION OF CHARGES  
268(1)
Where, after a registrable charge on property of a company has been created, a person other than the original chargee becomes the holder of the charge, the person who becomes the holder of the charge must, within 45 days after he, she or it becomes the holder of the charge:

(a) lodge a notice stating that he, she or it has become the holder of the charge; and

(b) give the company a copy of the notice.

268(2)
Where, after a registrable charge on property of a company has been created, there is a variation in the terms of the charge having the effect of:

(a) increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge; or

(b) prohibiting or restricting the creation of subsequent charges on the property;

the company must, within 45 days after the variation occurs, ensure that there is lodged a notice setting out particulars of the variation and accompanied by the instrument (if any) effecting the variation or a certified copy of that instrument.

268(3)
Where a charge created by a company secures a debt of an unspecified amount or secures a debt of a specified amount and further advances, a payment or advance made by the chargee to the company in accordance with the terms of the charge is not taken, for the purposes of subsection (2), to be a variation in the terms of the charge having the effect of increasing the amount of the charge or the liabilities (whether present or prospective) secured by the charge.

268(4)
A reference in this section to the chargee in relation to a charge is, if the charge is constituted by a debenture and debentures and there is a trustee for debenture holders, to be construed as a reference to the trustee for debenture holders.

268(5)
Nothing in section 263 requires the lodgment of a notice under that section in relation to a charge merely because of the fact that the terms of the charge are varied only in a manner mentioned in this section.
SECTION 269 SATISFACTION OF, AND RELEASE OF PROPERTY FROM, CHARGES  
269(1)
Where, with respect to a charge registered under this Part:

(a) the debt or other liability the payment or discharge of which was secured by the charge has been paid or discharged in whole or in part; or

(b) the property charged or part of that property is released from the charge;

the person who was the holder of the charge at the time when the debt or other liability was so paid or discharged or the property or part of the property was released must, within 14 days after receipt of a request in writing made by the company on whose property the charge exists, give to the company a memorandum in the prescribed form acknowledging that the debt or other liability has been paid or discharged in whole or in part or that the property or that part of it is no longer subject to the charge, as the case may be.

269(2)
The company may lodge the memorandum and, upon the memorandum being lodged, ASIC must enter in the Register particulars of the matters stated in the memorandum.

269(3)
The reference in subsection (1) to the person who was the holder of a charge at the time when the debt or other liability was so paid or discharged or the property or part of the property was released is, if the charge was constituted by a debenture or debentures and there was a trustee for debenture holders, to be construed as a reference to the person who was, at that time, the trustee for debenture holders.
SECTION 270 LODGMENT OF NOTICES, OFFENCES ETC.  
270(1)
Where a notice in respect of a charge on property of a company is required to be lodged under section 263 or 264 or subsection 268(2), the notice may be lodged by the company or by any interested person.

270(2)
Where default is made in complying with section 263 or 264 or subsection 268(2) in relation to a registrable charge on property of a company, the company and any officer of the company who is in default each contravene this subsection.

270(3)
Where a person who becomes the holder of a registrable charge fails to comply with subsection 268(1), the person and, if the person is a body corporate, any officer of the body corporate who is in default, each contravene this subsection.

270(4)
Where a document required by this Part other than subsection 268(1) to be lodged is lodged by a person other than the company concerned, that person:

(a) must, within 7 days after the lodgment of the document, give to the company a copy of the document; and

(b) is entitled to recover from the company the amount of any fees properly paid by the person on lodgment of the document.
SECTION 271 COMPANY TO KEEP DOCUMENTS RELATING TO CHARGES AND REGISTER OF CHARGES  
271(1)
A company must keep, at the place where the register referred to in subsection (2) is kept, a copy of:

(a) every document relating to a charge on property of the company that was or is lodged under this Part; and

(b) a copy of every document given to the company under this Part.

271(2)
A company must keep a register and must, upon the creation of a charge (whether registrable or not) on property of the company, or upon the acquisition of property subject to a charge (whether registrable or not), as soon as practicable enter in the register particulars of the charge, giving in each case:

(a) if the charge is a charge created by the company, the date of its creation or, if the charge was a charge existing on property acquired by the company, the date on which the property was so acquired; and

(b) a short description of the liability (whether present or prospective) secured by the charge; and

(c) a short description of the property charged; and

(d) the name of the trustee for debenture holders or, if there is no such trustee, the name of the chargee; and

(e) the name of the person whom the company believes to be the holder of the charge.

271(3)
A register kept by a company pursuant to subsection (2) must be open for inspection:

(a) by any creditor or member of the company - without charge; and

(b) by any other person - on payment for each inspection of such amount, not exceeding the prescribed amount, as the company requires or, where the company does not require the payment of an amount, without charge.

271(4)
A person may request a company to furnish the person with a copy of the register or any part of the register and, where such a request is made, the company must send the copy to that person:

(a) if the company requires payment of an amount not exceeding the prescribed amount - within 21 days after payment of the amount is received by the company or within such longer period as ASIC approves; or

(b) in a case to which paragraph (a) does not apply - within 21 days after the request is made or within such longer period as ASIC approves.

271(5)
If default is made in complying with any provision of this section, the company and any officer of the company who is in default are each guilty of an offence.
SECTION 272 CERTIFICATES  
272(1)
Where particulars of a charge are entered in the Register in accordance with this Part, ASIC must, on request by any person, issue to that person a certificate setting out those particulars and stating the time and day when a notice in respect of the charge containing those particulars was lodged with ASIC and, if the word " provisional " appears in the register in relation to the reference to that time and day, stating that fact.

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S 272(1) amended by No 101 of 2007, s 3, Sch 1, Pt 2 [ 191] (effective 1 July 2007).

272(2)
A certificate issued under subsection (1) is prima facie evidence of the matters stated in the certificate.

272(3)
Where particulars of a charge are entered in the Register in accordance with this Part, and the word " provisional " does not appear in the Register in relation to the reference to the time and day when a notice in respect of the charge was lodged, ASIC must, on request by any person, issue to that person a certificate stating that particulars of the charge are entered in the Register in accordance with this Part.

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S 272(3) amended by No 101 of 2007, s 3, Sch 1, Pt 2 [ 192 - 193] (effective 1 July 2007).

272(4)
A certificate issued under subsection 272(3) is conclusive evidence that the requirements of Part 2K.2 as to registration (other than the requirements relating to the period after the creation of the charge within which notice in respect of the charge is required to be lodged) have been complied with.

[ CCH Note: There is no s 273.]

SECTION 273A APPLICATION OF STATE AND TERRITORY LAWS TO CHARGES REQUIRED TO BE REGISTERED UNDER THIS PART  
273A(1)
This section deals with how particular State or Territory laws apply to a charge if notice of the charge must be lodged under this Part (whether before or after the prescribed time). The laws are called specified laws and are identified in subsections (4) and (5).

Note: Section 273D provides that this section does not apply to certain joint charges.

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S 273A(1) (Note) amended by No 116 of 2003, s 3, Sch 3 [ 26] (effective 28 November 2003).

273A(2)
A failure to register the charge under a specified law does not affect the validity, or limit the effect, of the charge.

273A(3)
The priority of the charge is to be determined under this Chapter and not under a specified law.

273A(4)
The specified laws are the State or Territory laws that are:

(a) specified in the following table; or

(b) specified by the regulations for the purposes of this section.

Specified laws for the purposes of this section
	Law	State or Territory
1	Bills of Sale Act 1898	New South Wales
2	Liens on Crops and Wool and Stock Mortgages Act 1898	New South Wales
3	Instruments Act 1958	Victoria
4	Bills of Sale and Other Instruments Act 1955	Queensland
5	Liens on Crops of Sugar Cane Act 1931	Queensland
6	Bills of Sale Act 1886	South Australia
7	Liens on Fruit Act 1923	South Australia
8	Stock Mortgages and Wool Liens Act 1924	South Australia
9	Bills of Sale Act 1899	Western Australia
10	Bills of Sale Act 1900	Tasmania
11	Stock, Wool, and Crop Mortgages Act 1930	Tasmania
12	Instruments Act 1933	Australian Capital Territory
13	Instruments Act	Northern Territory

273A(5)
The regulations may provide that a law specified in the table in subsection (4) is not a specified law for the purposes of this section.
SECTION 273B APPLICATION OF STATE AND TERRITORY LAWS TO TRANSFERS, ASSIGNMENTS OR GIVING OF CHARGES REGISTERED UNDER THIS PART  
273B(1)
This section deals with how particular State and Territory laws apply to a transfer, assignment or giving of a security by a company that is registrable under those laws if:

(a) notice in relation to the transfer, assignment or giving of security must be lodged under this Part; and

(b) the transfer, assignment or giving of security is registered under this Part.

The laws are called specified laws and are identified in subsections (3) and (4). The particular specified law under which the transfer, assignment or giving of security is registrable is called the applicable registration law .

Note: Section 273D provides that this section does not apply to certain joint charges.

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S 273B(1) (Note) amended by No 116 of 2003, s 3, Sch 3 [ 27] (effective 28 November 2003).

273B(2)
The transfer, assignment or giving of security is, subject to subsection 273A(3), as valid and effectual as if it had been duly registered under the applicable registration law.

273B(3)
The specified laws are the State or Territory laws that are:

(a) specified in the following table; or

(b) specified by the regulations for the purposes of this section.

Specified laws for the purposes of this section
	Law	Jurisdiction
1	Bills of Sale Act 1898	New South Wales
2	Bills of Sale and Other Instruments Act 1955 Part II	Queensland
3	Bills of Sale Act 1886	South Australia
4	Bills of Sale Act 1899	Western Australia
5	Bills of Sale Act 1900	Tasmania
6	Instruments Act 1933 Part III	Australian Capital Territory
7	Instruments Act Part II	Northern Territory

273B(4)
The regulations may provide that a law specified in the table in subsection (3) is not a specified law for the purposes of this section.

273B(5)
(Repealed by No 116 of 2003, s 3, Sch 3 [ 28] (effective 28 November 2003).)

273B(6)
(Repealed by No 116 of 2003, s 3, Sch 3 [ 28] (effective 28 November 2003).)
SECTION 273C APPLICATION OF SPECIFIED STATE AND TERRITORY LAWS TO CROP LIENS, WOOL LIENS AND STOCK MORTGAGES REGISTERED UNDER THIS PART  
273C(1)
This section deals with how particular State and Territory laws apply to a crop lien, wool lien or stock mortgage given by a company that is registrable under those laws if:

(a) notice in relation to the lien or stock mortgage is required to be lodged under this Part; and

(b) the lien or mortgage is registered under this Part.

The laws are called specified laws and are identified in subsections (3) and (4). The particular specified law under which the lien or mortgage is registrable is called the applicable registration law .

Note: Section 273D provides that this section does not apply to certain joint charges.

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S 273C(1) (Note) amended by No 116 of 2003, s 3, Sch 3 [ 29] (effective 28 November 2003).

273C(2)
The lien or mortgage is, subject to subsection 273A(3), as valid and effectual as if it had been duly registered under the applicable registration law.

273C(3)
The specified laws are the State or Territory laws that are:

(a) specified in the following table; or

(b) specified by the regulations for the purposes of this section.

Specified laws for the purposes of this section
	Law	Jurisdiction
1	Liens on Crops and Wool and Stock Mortgages Act 1898 Parts II and III	New South Wales
2	Instruments Act 1958 Parts VII and VIII	Victoria
3	Bills of Sale and Other Instruments Act 1955 Part II	Queensland
4	Liens on Crops of Sugar Cane Act 1931	Queensland
5	Liens on Fruit Act 1923	South Australia
6	Stock Mortgages and Wool Liens Act 1924	South Australia
7	Bills of Sale Act 1899 sections 7, 8 and 37	Western Australia
8	Stock, Wool, and Crop Mortgages Act 1930	Tasmania
9	Instruments Act 1933 Parts IV and V	Australian Capital Territory
10	Instruments Act Parts III and IV	Northern Territory

273C(4)
The regulations may provide that a law specified in the table in subsection (3) is not a specified law for the purposes of this section.

273C(5)
(Repealed by No 116 of 2003, s 3, Sch 3 [ 30] (effective 28 November 2003).)

273C(6)
(Repealed by No 116 of 2003, s 3, Sch 3 [ 30] (effective 28 November 2003).)
SECTION 273D SECTIONS 273A TO 273C DO NOT APPLY TO CHARGES GIVEN BY COMPANY JOINTLY WITH PERSON WHO IS NOT A COMPANY  
273D
Nothing in section 273A, 273B or 273C applies in relation to a charge given by a company jointly with another person who is not, or other persons at least one of whom is not, a company. SECTION 274 POWER OF COURT TO RECTIFY REGISTER  
274
Where the Court is satisfied:

(a) that a particular with respect to a registrable charge on property of a company has been omitted from, or misstated in, the Register or a memorandum referred to in section 269; and

(b) that the omission or misstatement:

(i) was accidental or due to inadvertence or to some other sufficient cause; or

(ii) is not of a nature to prejudice the position of creditors or shareholders; or

(iii) was due to a failure of an electronic system to lodge a notice in respect of a charge;

or that on other grounds it is just and equitable to grant relief;

the Court may, on the application of ASIC, the company or any person interested and on such terms and conditions as seem to the Court just and expedient, order that the omission or mis-statement be rectified.

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S 274 amended by No 101 of 2007, s 3, Sch 1, Pt 2 [ 194 - 195] (effective 1 July 2007).

[ CCH Note: The next section is s 277.]

SECTION 277 POWER TO EXEMPT FROM COMPLIANCE WITH CERTAIN REQUIREMENTS OF DIVISION  
277(1)
ASIC may, by instrument in writing, exempt a person, as specified in the instrument and subject to such conditions (if any) as are specified in the instrument, from compliance with such of the requirements of section 263, 264 or 268 relating to:

(a) the particulars to be contained in a notice under the relevant section; or

(b) the documents (other than the notice) to be lodged under the relevant section; or

(c) the verification of any document required to be lodged under the relevant section;

as are specified in the instrument.

277(2)
A person who is exempted by ASIC, subject to a condition, from compliance with a requirement of section 263, 264 or 268 must not contravene the condition.

277(3)
Where a person has contravened or failed to comply with a condition to which an exemption under this section is subject, the Court may, on the application of ASIC, order the person to comply with the condition.

PART 2K.3 - ORDER OF PRIORITY

SECTION 278 DEFINITIONS  
278(1)
In this Part:

priority time
, in relation to a registered charge, means:

(a) except as provided by paragraph (b) or (c) - the time and date appearing in the Register in relation to the charge, being a time and day entered in the Register pursuant to section 265; and

(b) where a notice has been lodged under section 264 in relation to a charge on property, being a charge that, at the time when the notice was lodged, was already registered under Part 2K.2 - the earlier or earliest time and day appearing in the Register in relation to the charge, being a time and day entered in the Register pursuant to section 264; and

(c) to the extent that the charge has effect as varied by a variation notice of which was required to be lodged under subsection 268(2) - the time and day entered in the Register in relation to the charge pursuant to subsection 265(14).

prior registered charge
, in relation to another registered charge, means a charge the priority time of which is earlier than the priority time of the other charge.

registered charge
means a charge that is registered under Part K.2 [ sic] .

subsequent registered charge
, in relation to another registered charge, means a charge the priority time of which is later than the priority time of the other registered charge.

unregistered charge
means a charge that is not registered under Part 2K.2 but does not include a charge that is not a registrable charge.

278(2)
A reference in this Part to a person having notice of a charge includes a reference to a person having constructive notice of the charge.

278(3)
Where, by virtue of the definition of priority time in subsection (1), a registered charge has 2 or more priority times each of which relates to a particular liability secured by the charge, each of those liabilities is, for the purposes of this Part, taken to be secured by a separate registered charge the priority time of which is the priority time of the first-mentioned registered charge that relates to the liability concerned.
SECTION 279 PRIORITIES OF CHARGES  
279(1)
Subject to this section, sections 280 to 282, inclusive, have effect with respect to the priorities, in relation to each other, of registrable charges on the property of a company.

279(2)
The application, in relation to particular registrable charges, of the order of priorities of charges set out in sections 280 to 282, inclusive, is subject to:

(a) any consent (express or implied) that varies the priorities in relation to each other of those charges, being a consent given by the holder of one of those charges, being a charge that would otherwise be entitled to priority over the other charge; and

(b) any agreement between those chargees that affects the priorities in relation to each other of the charges in relation to which those persons are the chargees.

279(3)
The holder of a registered charge, being a floating charge, on property of a company is taken, for the purposes of subsection (2), to have consented to that charge being postponed to a subsequent registered charge, being a fixed charge that is created before the floating charge becomes fixed, on any of that property unless:

(a) the creation of the subsequent registered charge contravened a provision of the instrument or resolution creating or evidencing the floating charge; and

(b) a notice in respect of the floating charge indicating the existence of the provision referred to in paragraph (a) was lodged with ASIC under section 263, 264 or 268 before the creation of the subsequent registered charge.

279(4)
Where a charge relates to property of a kind or kinds to which a particular paragraph or paragraphs of subsection 262(1) applies or apply and also relates to other property, sections 280 to 282, inclusive, apply so as to affect the priority of the charge only in so far as it relates to the first-mentioned property and do not affect the priority of the charge in so far as it relates to the other property.

279(5)
Sections 280 to 282, inclusive, do not apply so as to affect the operation of:

(a) the Copyright Act 1968 ; or

(b) the Designs Act 1906 ; or

(c) the Life Insurance Act 1995 ; or

(d) the Patents Act 1952 ; or

(e) the Trade Marks Act 1955 .
SECTION 280 GENERAL PRIORITY RULES IN RELATION TO REGISTERED CHARGES  
280(1)
A registered charge on property of a company has priority over:

(a) a subsequent registered charge on the property, unless the subsequent registered charge was created before the creation of the prior registered charge and the chargee in relation to the subsequent registered charge proves that the chargee in relation to the prior registered charge had notice of the subsequent registered charge at the time when the prior registered charge was created; and

(b) an unregistered charge on the property created before the creation of the registered charge, unless the chargee in relation to the unregistered charge proves that the chargee in relation to the registered charge had notice of the unregistered charge at the time when the registered charge was created; and

(c) an unregistered charge on the property created after the creation of the registered charge.

280(2)
A registered charge on property of a company is postponed to:

(a) a subsequent registered charge on the property, where the subsequent registered charge was created before the creation of the prior registered charge and the chargee in relation to the subsequent registered charge proves that the chargee in relation to the prior registered charge had notice of the subsequent registered charge at the time when the prior registered charge was created; and

(b) an unregistered charge on the property created before the creation of the registered charge, where the chargee in relation to the unregistered charge proves that the chargee in relation to the registered charge had notice of the unregistered charge at the time when the registered charge was created.
SECTION 281 GENERAL PRIORITY RULE IN RELATION TO UNREGISTERED CHARGES  
281
An unregistered charge on property of a company has priority over:

(a) a registered charge on the property that was created after the creation of the unregistered charge and does not have priority over the unregistered charge under subsection 280(1); and

(b) another unregistered charge on the property created after the first-mentioned unregistered charge. SECTION 282 SPECIAL PRIORITY RULES  
282(1)
Except as provided by this section, any priority accorded by this Part to a charge over another charge does not extend to any liability that, at the priority time in relation to the first-mentioned charge, is not a present liability.

282(2)
Where a registered charge on property of a company secures:

(a) a present liability and a prospective liability of an unspecified amount; or

(b) a prospective liability of an unspecified amount;

any priority accorded by this Part to the charge over another charge of which the chargee in relation to the first-mentioned charge does not have actual knowledge extends to the prospective liability, whether the prospective liability became a present liability before or after the registration of the first-mentioned charge.

282(3)
Where a registered charge on property of a company secures:

(a) a present liability and a prospective liability up to a specified maximum amount; or

(b) a prospective liability up to a specified maximum amount;

and the notice lodged under section 263 or 264 in relation to the charge sets out the nature of the prospective liability and the amount so specified, then any priority accorded by this Part to the charge over another charge extends to any prospective liability secured by the first-mentioned charge to the extent of the maximum amount so specified, whether the prospective liability became a present liability before or after the registration of the first-mentioned charge and notwithstanding that the chargee in relation to the first-mentioned charge had actual knowledge of the other charge at the time when the prospective liability became a present liability.

282(4)
Where:

(a) a registered charge on property of a company secures:

(i) a present liability and a prospective liability up to a specified maximum amount; or

(ii) a prospective liability up to a specified maximum amount;

but the notice lodged under section 263 or 264 in relation to the charge does not set out the nature of the prospective liability or the maximum amount so specified; or

(b) a registered charge on property of a company secures a prospective liability of an unspecified amount;

the following paragraphs have effect:

(c) any priority accorded by this Part to the charge over another charge of which the chargee in relation to the first-mentioned charge has actual knowledge extends to any prospective liability secured by the first-mentioned charge that had become a present liability at the time when the chargee in relation to the first-mentioned charge first obtained actual knowledge of the other charge;

(d) any priority accorded by this Part to the charge over another charge of which the chargee in relation to the first-mentioned charge has actual knowledge extends to any prospective liability secured by the first-mentioned charge that became a present liability, as the result of the making of an advance, after the time when the chargee in relation to the first-mentioned charge first obtained actual knowledge of the other charge if, at that time, the terms of the first-mentioned charge required the chargee in relation to that charge to make the advance after that time, and so extends to that prospective liability whether the advance was made before or after the registration of the first-mentioned charge and notwithstanding that the chargee in relation to the first-mentioned charge had actual knowledge of the other charge at the time when the advance was made.