Case note: repairer’s lien has priority over registered chattel security

In NCO Finance Australia Pty Ltd v Australian Pacific Airports (Melbourne) Pty Ltd [2013] FCCA 2274 the Federal Court Circuit Court decided that a repairer’s lien had priority over a chattel security registered under the Personal Property Securities Act.

NCO Finance was collecting a bad debt on behalf of St.George Finance relating to a motor vehicle that had been abandoned at Melbourne Airport. The car park operator was claiming carparking fees of about $6,500.

St George’s security was originally registered on REVS on 12 August 2011 and was subsequently migrated to the PPSR.

The vehicle entered the airport’s Short Term Car Park on or about 27 September 2011.

The airport did not register a security interest. The court agreed that it had a repairer’s lien.

The court decided that a repairer’s lien on goods, ranks in priority to any registered security interest in respect of those goods irrespective of the date and time of the registration of that registered security interest.

The Judge observed:

“The applicant (NCO Finance) sought to draw a distinction between a “repairer’s lien” and the general possessory lien established under the respondent’s terms and conditions. The applicant contended that the nature of the respondent’s possessory right could not properly be a repairer’s lien.

It was submitted that, for there to be a repairer’s lien, the “repairer” must show that value has been added to the chattel by the repairer, such as is commonly understood to be the case where a motor vehicle is repaired or serviced by a mechanic.

…. a repairer’s lien is defined in the Victorian legislation itself as:

repairer’s lien means a lien on goods in the possession of a person as security for payment for services or materials furnished in respect of those goods by that person in the ordinary course of business….

The applicant’s attempts, therefore, to draw a distinction between a repairer’s lien and the possessory lien is clearly frustrated by the definition outlined above.

I am satisfied that the respondent, indeed, had a “repairer’s lien” within the meaning of the Chattel Securities Act 1987 as it possessed the vehicle as a security for payment of its fees, which in turn, were charged for the provision of parking services furnished in the ordinary course of the respondent’s business.”

The court made the decision under the transitional provisions.

Once the transition ends on 1 February 2014, section 73 of the PPSA will apply with the same result: a statutory interest such as a repairer’s lien will prevail over a PPSR security.

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