CITATION  NSWSC 37
JUDGE/S BLACK J
Varian Medica Systems Australiasia Pty Ltd supplied linear accelerators (equipment used for cancer treatment) to CCIA under a perfected purchase money security interest. The linear accelerators were large items, bolted to a steel frame, removeable but only with a couple of days’ work and $60,000 of expenditure.
CCIA’s operations were conducted in premises owned by Cortez Enterprises Pty Ltd. The property was mortgaged to Suncorp-Metway and other financiers. CCIA went into administration. Cortez and its financiers claimed the equipment constituted ‘fixtures’, and so belonged to Cortez and was subject to the real property mortgages. The court held that was not ‘fixtures’, applying the test of ascertaining the objective intention of the equipment’s owner, with relevant factors including the degree of affixation and the object or purpose for which it was affixed.
In considering the parties’ intention, the court said that the fact that CCIA and Varian had proceeded on the basis that CCIA was able to give effective security over the equipment was inconsistent with any objective intention that it would become part of the premises and owned by Cortez.
The court declared that the equipment was not fixtures, and that Cortez and its financiers held no interest in it.
The summary of the pertinent points in this legal case update has been provided by Steve Pemberton, Lawyer and Consultant, as an extract from his digest of PPSA cases.