SUPREME COURT OF QUEENSLAND

CITATION:	Kirk v Moreton Resources Limited & Ors [2026] QSC 66 	
PARTIES:	DARRYL EDWARD KIRK AS RECEIVER OF MORETON RESOURCES LIMITED (RECEIVER APPOINTED) ACN 060 111 784
(applicant)
v
MORETON RESOURCES LIMITED (RECEIVER APPOINTED) ACN 060 111 784
(first respondent)
ALEXANDER JASON ELKS
(second respondent)
COMMISSIONER OF TAXATION
(third respondent)
MRL MORETON RESOURCES PTY LTD ACN 648 221 292
(fourth respondent)	
FILE NO/S:	BS1666/25
	
DIVISION:	Trial	
PROCEEDING:	Application	
ORIGINATING COURT:	Supreme Court at Brisbane	
DELIVERED ON:	24 April 2026	
DELIVERED AT:	Brisbane	
HEARING DATE:	15 August 2025, 12 November 2025	
JUDGE:	Wilson J	
ORDER:	1.	Parties are to provide a form of order consistent with these reasons by 10am on 1 May 2026. 
2.	Question of costs adjourned to a date to be fixed. 	
CATCHWORDS:	CORPORATIONS AND CORPORATE INSOLVENCY –ASSIGNMENT OF SECURITY INTEREST – FUTURE PROPERTY AND AFTER-ACQUIRED PROPERTY – where the first respondent entered into a Security Trust Deed which established a security trust – where administrators and liquidators were appointed to the first respondent and its four subsidiaries – where the applicant was appointed as receiver of the property of one of the subsidiaries under the Secured Debenture Deed – where the first respondent granted the trustee of the trust a security interest in all its present and after-acquired property – where by a deed of assignment the first respondent, through its liquidators, assigned future property to the fourth respondent, being the property likely to come into existence if the first respondent succeeded in one or both of the first respondent’s proceedings in the Administrative Appeals Tribunal concerning a tax refund – whether, as the applicant contends, the security interest will attach to the refund and take priority over the fourth respondent’s rights as assignee – whether, as the respondents contend, the refund will automatically be assigned in equity to the fourth respondent without ever becoming property of the first respondent – whether the Secured Debenture Deed created a security interest which could attach to mere expectancies when they fall in 
Corporations Act 2001 (Cth), s 444D(2), s 444GA(l)(b), s 482
Personal Property Securities Act 1993 (CAN)
Personal Property Securities Act 2009 (Cth), s 10, s 12, s 18, 19, s 267
Taxation Administration Act 1953 (Cth), s 14ZYA(2)

Akron Tyre Co Pty Ltd v Kittson (1951) 82 CLR 477
Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337
Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd [2015] WASCA 95
Bank of Montreal v Innovation Credit Union [2010] 3 SCR 1
Blackbird First Mortgage Corporation Pty Ltd v Jacobs [2025] FCAFC 136
Bluenergy Group (2015) 107 ACSR 373
Booth v The Commissioner of Taxation of the Commonwealth of Australia (1987) 164 CLR 159
Carter Holt Harvey Wood Products Australia Pty Ltd v Commonwealth [2019] HCA 20
CGU Insurance Ltd v One.Tel Ltd (In liq) (2010) 242 CLR 174
Dean-Willcocks v Nothintoohard Pty Ltd (in liq) (2005) 53 ACSR 587
Dean-Willcocks v Nothintoohard Pty Ltd (in liq) (2006) 25 ACLC 109
Herdegen v Commissioner of Taxation (1988) 84 ALR 271 
Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1
Re Anroma Pty Ltd [1987] 2 Qd R 134
Re Antqip Hire Pty Ltd (in liq) [2021] NSWSC 1122
Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84
Re Lind [1915] 2 Ch 345
Royal Bank of Canada v Radius Credit Union Ltd [2010] 2 SCR 38
Royal Bank of Canada v Sparrow Electric Corp [1997] 1 SCR 411
Tailby v Official Receiver (1888) 13 App Cas 523	
		
COUNSEL:	C A Wilkins and L M Bullen for the applicant
E J Ananian-Cooper for the Commissioner  
M A Goldsworthy for the first, second and fourth respondents
	
SOLICITOR:	Colin Biggers & Paisley for the applicant
Gadens for the Commissioner
Sasha Legal for the first, second and fourth respondents 	

[1]	Mr Darryl Kirk (“the applicant”) is the receiver of the first respondent, Moreton Resources Pty Limited (Receiver Appointed) (“Moreton”). 
[2]	Moreton was a public company until 26 December 2024, and the second respondent (“Mr Elks”) was a director of Moreton since 8 April 2024.  
[3]	The third respondent is the Commissioner of Taxation (“the Commissioner”) and has not taken an active role in these proceedings, except to seek a declaration which is not opposed by the other parties. 
[4]	Mr Elks controls the fourth respondent, MRL Moreton Resources Pty Ltd (“Elks Co”). 
[5]	Considering the Commissioner’s minor position in this application, the first, second, and fourth respondents will be collectively referred to as “the respondents” in these reasons.  
[6]	The applicant seeks three declarations:
(a)	firstly, a declaration confirming that two proceedings in the Administrative Review Tribunal (“the Tribunal”) between Moreton and the Commissioner were validly commenced by Moreton (“the first declaration”);
(b)	secondly, a declaration that the applicant is entitled henceforth to maintain, conduct, and carry on those two proceedings for, and on behalf of, the first respondent (“the second declaration”); and  
(c)	thirdly, a declaration that the applicant is entitled henceforth to commence, maintain and conduct any proceedings for, and on behalf of, Moreton in relation to its tax liability for the financial year ending 30 June 2024, and to do all other things that Moreton could do, or could otherwise have done, in relation to that liability (“the third declaration”).
[7]	There is a fourth declaration which is sought by the Commissioner, that is, that on 16 April 2024, Moreton validly gave notice to the Commissioner under the Taxation Administration Act 1953 (Cth) section 14ZYA(2) in respect of objections for the financial year ending 30 June 2013 lodged on 12 November 2015 and 26 September 2016 (“the 14ZYA Notice”). This declaration is not opposed by the other parties.
[8]	All parties agree that Moreton validly issued the 14ZYA Notice and commenced the proceedings in the Tribunal.
[9]	The applicant and respondents accept that the first and fourth declarations can be made.  I will make those declarations in circumstances where:  
(a)	Moreton’s directors had power to commence the two proceedings in the Tribunal; and
(b)	in any event, the receiver has ratified Moreton’s commencement of those proceedings.
[10]	However, the applicant and respondents disagree in respect of the second and third declarations. 
[11]	Central to this application is a research and development (“R&D”) tax incentive scheme administered by the Commissioner.   
[12]	For each of the financial years ending 30 June 2012, 30 June 2013, and 30 June 2014, Moreton successfully applied to Innovation and Science Australia (“ISA”) for the registration of certain activities it had undertaken as R&D activities.
[13]	On 15 November 2013, Moreton lodged its tax return for the 2013 financial year declaring nil tax payable and an entitlement to a refundable tax offset in an amount of $7,104,743.55 based on the registration by ISA of its activities as R&D activities.  
[14]	The Commissioner paid the amount of that offset to Moreton on or about 8 May 2014 (“the 2013 refund”).
[15]	On 11 March 2015, Moreton informed the Commissioner that it had identified several adjustments to be made to the 2013 refund and requested that the Commissioner amend the tax return accordingly. 
[16]	This would have the effect of increasing the refundable tax offset from $7,104,743.55 to $11,800,351.88; a difference of $4,695,608.33 (“the further 2013 offset amount”).
[17]	ISA and the Commissioner contested the R&D claims. A convoluted chronology then ensued involving proceedings in the Tribunal and an appeal to the Full Court of the Federal Court of Australia. The details of the back and forth of reviews, hearings, and appeal are irrelevant for this application. 
[18]	Of relevance is that, on 31 July 2024, Moreton commenced a proceeding in the Tribunal (“the first Tribunal proceeding”). Accordingly, if Moreton is wholly successful in this proceeding, then:
(a)	Moreton will not be required to repay the $7,104,743.55 it has already received from the Commissioner; and 
(b)	the Commissioner will be liable to pay Moreton $4,695,608.33 in relation to the further 2013 offset amount.
[19]	In late 2024, Moreton commenced a second proceeding in the Tribunal. The applicant has no knowledge of the nature of this proceeding, save for that it relates to Moreton’s taxation affairs in the 2015 and 2016 financial years. 
[20]	However, the applicant’s understanding, based on advice the applicant has obtained from the tax advisor he engaged on behalf of Moreton, is that Moreton may be entitled to the following R&D refunds amounting to $2,826,604.00.   
[21]	As success by Moreton in the Tribunal will mean the Commissioner has a monetary liability to Moreton, this will likely result in the respondent acquiring property. 
Facts and issues not in dispute
[22]	The applicant and the respondents have agreed that the following matters are uncontroversial:
(a)	Melgear is the trustee of the security trust created by the Security Trust Deed, the Moreton Security Trust;
(b)	on 25 May 2022, Melgear appointed the applicant as the receiver of Moreton’s property;
(c)	by the Secured Debenture Deed, Moreton granted the trustee of the Moreton Security Trust (Melgear) a security interest in all its present and after-acquired property;  
(d)	that security interest was subsequently registered on 10 October 2019; 
(e)	by a deed of assignment made between the liquidators of Moreton and Elks Co dated 9 April 2021, for value, Moreton assigned future property (or purported to assign future property) to Elks Co, viz., the property likely to come into existence if Moreton succeeds in one (or both) of the two proceedings in the Tribunal;
(f)	on 8 June 2022, the Deed of Company Arrangement (“the DOCA”) was executed for the four subsidiary companies of Moreton; 
(g)	on 21 September 2022, leave was given to the deed administrators pursuant to section 444GA(l)(b) of the Corporations Act 2001 (Cth) (“CORPA”) to transfer all of the issued shares in Moreton to Elks Co in accordance with the DOCA;
(h)	on 2 December 2022, Burns J declared that the DOCA had been wholly effectuated and terminated the windings up of the four subsidiary companies pursuant to section 482 of the CORPA; 
(i)	the applicant has power to do such things as he considers appropriate to create property for Moreton;  
(j)	Moreton validly issued the 14ZYA Notice and commenced the two proceedings in the Tribunal; 
(k)	that the claims being pursued by Moreton in the Tribunal are mere expectancies and not property; 
(l)	it is possible property will come into existence if Moreton succeeds in one (or both) of the two proceedings in the Tribunal; and 
(m)	as at 23 July 2025, the balance of the secured debt owed by Moreton to Melgear under the Secured Debenture Deed was $1,368,597.85. 
The issues in dispute
[23]	The applicant’s position is that Melgear’s security interest will attach to property of Moreton upon its creation in the future (including, relevantly, the property likely to come into existence if Moreton succeeds in one or both of the proceedings in the Tribunal), notwithstanding both the effectuation of the DOCA and the Deed of Assignment dated 9 April 2021.
[24]	The applicant seeks a finding to be made in this application in such terms. 
[25]	If the finding is made, then, in the exercise of the applicant’s power to do such things as the applicant considers appropriate to create property for Moreton, the applicant is entitled to take over Moreton’s conduct of the two proceedings in the Tribunal. 
[26]	If the finding is made, the second and third declarations will follow.
[27]	The respondents oppose the finding and the second and third declarations being made for two reasons:
(a)	Moreton, by its liquidators, validly assigned the benefit of any refund to Elks Co for value with the effect that the refund will never become property of Moreton and/or become subject to Melgear’s security interest (“the assignment issue”); and 
(b)	further, or in the alternative, even if any refund will, somehow, become property of Moreton upon coming into existence, Melgear’s security interest will not attach to it and/or will be unable to be enforced in circumstances where the debt previously secured by the security interest has been released by operation of the deed of company arrangement (“the DOCA issue”).   
[28]	The assignment issue and the DOCA issue raised by the respondents are independent and discrete from each other. Accordingly, if the respondent’s submissions are accepted on either issue, then the contentious declarations cannot be made.  
The assignment issue 
[29]	There are two relevant events that are central to this issue: 
(a)	the Secured Debenture Deed which was registered on 10 October 2019; and
(b)	the Deed of Assignment made between the liquidators of Moreton and Elks Co dated 9 April 2021.  
 The Secured Debenture Deed
[30]	Moreton is a “Security Provider” as defined in the Secured Debenture Deed. The “Security Trustee” when the Secured Debenture Deed was made was First Samuel Ltd, but on 16 October 2020, First Samuel Ltd was replaced by Melgear.
[31]	Clause 10.2 of the Secured Debenture Deed provides:

“(a)	Each Security Provider grants a Security Interest in its Secured Property to the Security Trustee as security for:
(i)	the payment of all Outstanding Moneys to the Debenture holders; and
(ii)  	the performance of all Guaranteed Obligations under this document.
(b)	Each Security Provider:
(i)    	acknowledges that it has received valuable consideration for the grant of the Security Interest;
(ii)  	represents and warrants that it is the sole legal and beneficial owner of, and has good title to, its Secured Property; and
(iii) 	authorises the Security Trustee to file all Financing Statements and other documents and otherwise do all things which are necessary to Perfect and continue the Security Trustee’s Security Interest, to protect and preserve the Secured Property and to realise the Security Interest held by the Security Trustee.”
[32]	The consideration to which reference is made in clause 10.2(b)(i) was the promises made by each “Debenture holder” as defined therein to take up debentures to be issued by Moreton.
[33]	Clause 1.1 of the Secured Debenture Deed defined the following terms:
(a)	“Outstanding Moneys” as meaning “all outstanding debts and monetary liabilities of [Moreton] to a Debenture holder under or in relation to this document and includes the Face Value (to the extent not repaid or prepaid by [Moreton]) and any interest payable thereon to the extent outstanding”.
(b)	“Security Interest” as meaning: 
(i)	“in relation to Personal Property, a PPS Security Interest”; and
(ii)	“in relation to any other property, an interest or power reserved in or created or otherwise arising in or over an interest in any asset whether under a bill of sale, mortgage, charge, lien, pledge, other security interest or preferential arrangement (including retention of title), trust or power or otherwise by way of, or having similar commercial effect to, security for the payment of a debt, any other monetary obligation or the performance of any other obligation”.
(c)	“PPSA” as meaning Personal Property Securities Act 2009 (Cth).
(d)	“Personal Property” as having the meaning given to that term in the PPSA.
(e)	“PPS Security Interest” as meaning “a security interest as that term is defined in the PPSA”.
(f)	“Secured Property” as meaning “in respect of each Security Provider, all of that Security Provider’s present and after-acquired property and includes anything in respect of which the Security Provider has at any time sufficient right, interest or power to grant a Security Interest”.
[34]	The PPSA defines “security interest” and “personal property”.
[35]	Section 12 of the PPSA sets out the meaning of “security interest”: 
“12 Meaning of security interest 
(1)    A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property).
	Note: 	For the application of this Act to interests, see section 8.
(2) 	For example, a security interest includes an interest in personal property provided by any of the following transactions, if the transaction, in substance, secures payment or performance of an obligation:
	(a) a fixed charge; 
	(b) a floating charge; 
	(c) a chattel mortgage; 
(d) a conditional sale agreement (including an agreement to sell subject to retention of title);
(e)  a hire purchase agreement;
(f)  a pledge; 
(g)  a trust receipt; 
(h)  a consignment (whether or not a commercial consignment); 
(i)  a lease of goods (whether or not a PPS lease); 
(j)  an assignment; 
(k)  a transfer of title; 
(l)  a flawed asset arrangement.
(3) 	A security interest also includes the following interests, whether or not the transaction concerned, in substance, secures payment or performance of an obligation: 
(a)  the interest of a transferee under a transfer of an account or chattel paper; 
(b)  the interest of a consignor who delivers goods to a consignee under a commercial consignment; 
(c)	the interest of a lessor or bailor of goods under a PPS lease. 
(3A) A person who owes payment or performance of an obligation to another person may take a security interest in the other person’s right to require the payment or the performance of the obligation. 
(4) 	Without limiting subsection (3A): 
(a)   an account debtor, in relation to an account or chattel paper, may take a security interest in the account or chattel paper; and 
(b) 	an ADI may take a security interest in an ADI account that is kept with the ADI. 
(5) 	A security interest does not include: 
	(a) a licence; or 
(b) an interest of a kind prescribed by the regulations for the purposes of this section.
(6) 	A security interest is not created only by an agreement or undertaking to do either of the following: 
(a) to postpone or subordinate a person’s right to payment or performance of all or any part of a debtor’s obligation to another person’s right to payment or performance of all or any part of a debtor’s obligation to another person’s right to payment or performance of all or any part of another of the debtor’s obligations; 
(b) 	to postpone or subordinate all or any of a secured party’s rights under a security agreement to all or any part of another secured party’s rights under another security agreement with the same grantor.”
[36]	Section 10 of the PPSA defines “personal property” as:
“personal property means property (including a licence) other than:
 (a)  land; or
 (b)  a right, entitlement or authority that is:
(i)   granted by or under a law of the Commonwealth, a State or a Territory; and
(ii)  declared by that law not to be personal property for the purposes of this Act.”
The Deed of Assignment 
[37]	On 9 April 2021, Elks Co entered into a deed of assignment with Moreton and its then-liquidators. 
[38]	As noted, it is uncontroversial that by a deed of assignment made between the liquidators of Moreton and Elks Co dated 9 April 2021, for value, Moreton assigned future property (or purported to assign future property) to Elks Co, viz., the property likely to come into existence if Moreton succeeds in one (or both) of the two proceedings in the Tribunal. 
The issues
[39]	The applicant states that, notwithstanding this assignment, to the extent the refund comes into existence, Melgear’s security interest will attach to the refund and effectively take priority to Elks Co’s rights as assignee. 
[40]	The respondents contend otherwise and state that:
(a)	the Secured Debenture Deed did not create a security interest which could attach to mere expectancies when they fall in and, thus, if and when the refund comes into being it will not be attached by Melgear’s security interest;
(b)	if the expectancies fall in, (i.e. if the refund comes into existence), then Moreton will hold the refund upon trust for Elks Co; and
(c)	even if Melgear has a security interest which could attach to the expectancies when they fall in and become the refund, the security interest will not attach to the refund because the refund will not be Moreton’s property.
The applicant’s submissions  
[41]	I will set out the foundational basis which underpins the applicant’s position. 
[42]	It is uncontroversial that the claims being pursued by Moreton are expectancies and not property. In such circumstances, the applicant submits that:
(a)	an expectancy cannot be assigned;
(b)	the security interest cannot attach to property that does not exist; and 
(c)	Melgear’s security interest will attach to the refund if it comes into being. 
[43]	Accordingly, the applicant submits that:  
(a)	if the refund does come into being, Melgear and Elks Co will both have proprietary rights in it, and the issue will then be one of priority as between them;
(b)	Melgear’s security interest in after-acquired property was an infirmity restricting what Moreton could agree to assign to Elks Co; and 
(c)	upon attachment, Melgear’s security interest in the refund will be a legal interest in the refund.
[44]	The applicant submits that by the Secured Debenture Deed, Moreton granted a security interest to Melgear in all its present and after-acquired property, and: 
(a)	there is no distinction to be drawn between an expectancy and future (or after-acquired) property;
(b)	property will come into being if, and when, the expectancy falls in; and
(c)	if Moreton succeeds in its claims in the Tribunal, it is likely that the expectancy will fall in, i.e., the refund will come into being.
[45]	The applicant submits that an expectancy is a species of future property which, if it falls in, will be after-acquired property within the meaning of the Secured Debenture Deed to which the security interest granted by the Secured Debenture Deed will attach.   
[46]	The applicant refers to a multitude of texts to support its position that an expectancy is a type of future property. In On Equity (Thomson Reuters, 2019), Young, Croft and Smith state at [10.380]: 
“Historically, the most common form of future property was the real property a person expected to inherit. However, chattels may also be future property, as may choses in action. The distinction between an existing chose in action and a future one is not always easy to draw. A contractual right to be paid money at some future date is not a future chose in action but a present chose in action.  However, a prospect or possibility of becoming entitled to money or property is a future chose in action.  Thus, a debt that is merely contingent, in the sense that there is only a possibility that it will mature and become payable, is a future chose in action.  The case of Tailby v Official Receiver, for example, involved both existing book debts and book debts which had not yet come into existence.  The former were present choses in action, the latter future choses in action.”
[47]	Further, the applicant refers to Re Lind, and subsequent cases, to support its position.
[48]	In Re Lind, each assignment of Mr Lind’s expectant share in his mother’s deceased estate was by way of security for the repayment of moneys lent by the respective assignee to Mr Lind. The first and second mortgagees successfully opposed the claim of the third mortgagee to receive Mr Lind’s share of his mother’s deceased estate. The trial judge declared that the first and second mortgagees had priority over the third mortgagee. An appeal by the third mortgagee was dismissed by the Court of Appeal, whereby: 
(a)	Swinfen Eady LJ referred to the 1905 and 1908 mortgages of Hugh Lind’s expectant share in his mother’s deceased estate (which were respectively granted to the first and second mortgagees) as mortgages of “future property”; and
(b)	Bankes LJ referred, with approval, to a statement by Lord Herschell in Tailby v Official Receiver, refusing to draw any “distinction between an instrument assigning future book debts which may become due to the assignor in any business carried on by him and one assigning future bequests and devises to which he may under any will become entitled”. 
[49]	In Palette Shoes Pty Ltd (in liq) v Krohn, Dixon J, referring to Re Lind at 364-6, described an equitable assignee’s “prospective right in property” which is future property as one which “attaches without more eo instanti when the property arises and gives the assignee an equitable interest therein”. 
[50]	In Re Anroma Pty Ltd, McPherson J referred to with approval and applied that statement by Dixon J in Palette Shoes:
“In Palette Shoes Pty Ltd v. Krohn, at 27, Dixon J. makes the point when he describes the proprietary right of the assignee as attaching “without more eo instanti when the property arises and gives the assignee an equitable interest therein.””
[51]	I note that the respondents also rely on this principle to argue that its prospective right in the refund will attach immediately upon the refund coming into being.  However, the applicant submits that principle does not preclude other prospective rights in the refund also attaching to the refund immediately upon its coming into being, as just as the equitable interests of the first and second mortgagees attached to Mr Lind’s share of his mother’s deceased estate upon her death, Melgear’s security interest will attach the refund immediately upon its coming into being. 
[52]	In Akron Tyre Co Pty Ltd v Kittson, Latham CJ stated that “future property” is “property which does not exist or in which the assignor at the time of assignment has no proprietary interest”.       
[53]	As a result of the Deed of Assignment, the applicant accepts that if, and when, the refund comes into existence, Moreton will hold the refund on trust for Elks Co.  However, the applicant adds the qualification that Moreton will hold the refund as trustee for Elks Co “subject to [Moreton’s] security interest”.   
[54]	Further, the applicant submits that a security agreement may provide for a security interest in after-acquired property due to:
(a)	sections 18 and 19 of the PPSA; and
(b)	an inchoate proprietary interest in future property.
[55]	Section 18 of the PPSA states: 
“General rules about security agreements and security interests
(1)	A security agreement is effective according to its terms.
(2)	A security agreement may provide for security interests in after-acquired property. 
(3)	A security interest in after-acquired property attaches without specific appropriation by the grantor. 
(4)	A security agreement may provide for future advances. 
(5)	A security interest is taken to secure reasonable expenses in relation to the enforcement of the security interest, unless the parties agree otherwise.”
[56]	Pursuant to section 18(2) of the PPSA, a security interest may provide for a security interest in after-acquired property. A security interest attaches to after-acquired property: 
(a)	without specific appropriation by the grantor; and
(b)	when the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party.
[57]	In relation to sections 18(2) and (3), Professor Duggan in Australian Personal Property Securities Law (LexisNexis, 4th ed, 2024) at [4.6] states: 
“Subsection 18(2) states that a security agreement may provide for security interests in after-acquired property.  Pre-PPSA, a security interest in after-acquired collateral was ineffective at common law without some further act of assurance on the grantor’s part after they acquired the collateral.  But in equity, the security interest took effect automatically as soon as the collateral came into the grantor’s hands.  The PPSA replaces the old common law and equitable doctrines with the simple proposition stated in subs 18(2).  By virtue of this provision, read in conjunction with the attachment rules in s 20, a security interest in after-acquired property takes effect automatically when the grantor acquires rights in the collateral.  Subsection 18(3) puts this point beyond doubt by providing that a security interest in after-acquired property attaches without specific appropriation by the grantor.  At general law, an equitable security interest is not as good as a legal one … But, in the PPSA context, the distinction between legal and equitable security interests does not arise.  A PPSA security interest in after-acquired property is qualitatively no different from a security interest in collateral the grantor already owns, and the statutory priority rules do not discriminate between security interests on this basis.”
[58]	Section 19 of the PPSA states:
“19 Enforceability of security interests against grantors–attachment 
		Attachment required for enforceability 
(1)	A security interest is enforceable against a grantor in respect of particular collateral only if the security interest has attached to the collateral. 
Attachment rule 
(2)	A security interest attaches to collateral when: 
(a)  the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party; and 
(b)	either: 
	(i)  value is given for the security interest; or 
	(ii) the grantor does an act by which the security interest arises.
Time of attachment 
(3)	Subsection (2) does not apply if the parties to a security agreement have agreed that a security interest attaches at a later time, in which case the security interest attaches at the time specified in the agreement.
(4)	To avoid doubt, a reference in a security agreement to a floating charge is not a reference to an agreement that the security interest created by the floating charge attaches at a time later than provided under subsection (2). 
Goods leased, bailed, consigned or sold under a conditional sale agreement 
(5)	For the purposes of paragraph (2)(a), a grantor has rights in goods that are leased or bailed to the grantor under a PPS lease, consigned to the grantor, or sold to the grantor under a conditional sale agreement (including an agreement to sell subject to retention of title) when the grantor obtains possession of the goods. 
(6)	Subsection (5) does not limit any other rights the grantor may have in the goods. 
Note: 	A security interest may attach to crops while they are growing, and to the products of livestock, before they become proceeds of the crops or livestock (for example, wool before it is shorn). See subsections 31(4) and (5) (meaning of proceeds) and section 84A (security interests in crops and livestock).”
[59]	Professor Duggan considers the operation of section 19(2) of the PPSA in this way at [4.14] and [4.15]:
“The third requirement for attachment is that the grantor must have rights in the collateral, or at least the power to transfer rights to a secured party.  Once again, the explanation is basic: ‘a security interest is a proprietary interest.  As such, it requires a subject matter.  If the asset does not yet exist, or if the [grantor] has not yet acquired an interest in it, there is nothing to which the security interest can attach’.  The grantor must have rights in the collateral, but full ownership is not required.  Any proprietary interest will be sufficient.  In iTrade Finance Inc v Bank of Montreal, the Supreme Court of Canada held that a voidable title satisfied the requirement.  In that case, iTrade loaned money to a company controlled by a fraudster.  The fraudster appropriated the loan funds and used them to purchase securities which he then pledged to the Bank of Montreal.  The court held that the bank acquired an enforceable security interest in the securities because the PPSA attachment requirements were met.  In particular, the fraudster had rights in the securities even though he had acquired them with funds fraudulently obtained from iTrade, because, at the time of the pledge agreement, iTrade had not taken steps to avoid the purchases.
The idea that an interest less than full ownership is sufficient for attachment of a security interest may seem counter-intuitive to lawyers schooled in the notion nemo dat quod non habet (no one can give what they do not have): how can the grantor give the secured party a potentially larger interest than they hold themselves? As Cuming, Walsh and Wood point out, however, there are two separate issues in play: attachment and priority.  If the grantor has only a limited interest in the collateral, the security interest will attach, but it will attach only to the interest the grantor has.  So, for example, in the iTrade case, there were two questions: (1) did the bank’s security interest attach to the pledged securities; and (2) if so, did the bank’s claim prevail over iTrade’s interest?  As explained above, the court answered the first question in the affirmative.  On the second question, it found in the bank’s favour on the ground that: (1) iTrade’s claim was an equitable one (based on its right to avoid the purchases); (2) the bank’s PPSA security interest was a legal interest; and (3) the bona fide purchaser rule applied.  The same analysis would apply to a security interest given fraudulently by a trustee in trust property.  The trustee has sufficient rights in the collateral for attachment of the security interest, but it does not follow that the secured party will prevail over the beneficiaries’ claims.  The answer to the second question depends on the bona fide purchaser rule and, in particular, on whether the secured party had notice of the trust at the time of its agreement with the trustee.”
							[Citations omitted] 
[60]	Further, the applicant refers to Albarran v Queensland Excavation Services Pty Ltd, where Brereton J considered the operation of section 19(2) of the PPSA in the circumstances of that case:
“[26]  	Thus pursuant to s 19(5), Maiden — as a PPS lessee in possession of the Caterpillars — had rights in the Caterpillars, to which a security interest could attach. These rights are not limited to possessory rights, but include proprietary rights. Section 19(5) has equivalents in the New Zealand and Canadian PPS legislation from which the PPSA is derived. For example, the British Columbia Personal Property Security Act 1989 (CAN) provides, by s 12(1)(b), that a security interest “attaches” when the debtor acquires “rights in the collateral”, and s 12(2) states that “a debtor has rights in goods leased to the debtor … when he obtains possession of them in accordance with the lease”. In Re Giffen (1998) 155 DLR (4th) 332, Iacobucci J, delivering the judgment of the Supreme Court of Canada, said of that provision (at [32], [36]-[37]): 
Thus, upon delivery of the car to the bankrupt, the lessor had a valid security interest in the car that could be asserted against the lessee and against a third party claiming a right in the car. However, the lessor’s security interest remained vulnerable to the claims of third parties who obtain an interest in the car through the lessee including trustees in bankruptcy. In order to protect its security interest from such claims, the lessor must therefore perfect its interest through registration of its interest (s 25), or repossession of the collateral (s 24). The lessor did not have possession of the car, and it did not register its security interest. Thus, prior to the bankruptcy, the lessor held an unperfected security interest in the car. 
…
I note that s 12(2) of the PPSA also recognizes that a lessee obtains a proprietary interest in leased goods. Section 12(2) states explicitly that “a debtor has rights in goods leased to the debtor … when he obtains possession of them in accordance with the lease” (emphasis added). Thus, s 12 operates to “deem or recognize that a lessee has a proprietary interest” (Buckwold and Cuming, supra, at p. 471). The Saskatchewan Court of Appeal considered a provision similar to s 12 of the British Columbia PPSA in International Harvester and held that (at p. 206):
… a trustee in bankruptcy, upon whom there devolved a chattel in the possession of the bankrupt under a commercial lease for a term exceeding a year, succeeds to the contractual or possessory interest of the bankrupt in that chattel, as well as the bankrupt’s statutory or proprietary interest therein as conferred upon the debtor by s 12 of the Act.
From the perspective of both the PPSA and the BIA as bankrupt, as lessee, can be described as having a proprietary interest in the car. 
			[Emphasis added]
[27]    	Similarly, the Personal Property Securities Act 1999 (NZ) provides, by s 40:
(1) A security interest attaches attaches to collateral when — 
(a) Value is given by the secured party; and 
(b) The debtor has rights in the collateral; and 
(c) Except for the purpose of enforcing rights between the parties to the security agreement, the security agreement is enforceable against third parties within the meaning of section 36. 
… 
(3) For the purposes of subsection (1)(b), a debtor has rights in goods that are leased to the debtor, consigned to the debtor, or sold to the debtor under a conditional sale agreement (including an agreement to sell subject to retention of title) no later than when the debtor obtains possession of the goods,
[28]   In Graham v Portacom New Zealand Ltd [2004] 2 NZLR 528, Portacom leased five portable buildings to NDG Pine Ltd, which it delivered to NDG over a four-year period. NDG granted a debenture to a bank, which debenture was registered on the register maintained pursuant to the Act. Portacom did not register its interest (as lessor) in the buildings. The bank appointed receivers and managers of NDG’s assets, who claimed to be entitled to sell the buildings; Portacom disputed this. Rodney Hansen J held that the rights of a lessee in leased goods referred to in s 40(3) of the PPSA were not confined to the lessee’s possessory rights and that, as against the lessee’s secured creditors, the lessee had rights of ownership in the goods sufficient to permit a secured creditor to acquire rights in priority to those of the lessors; accordingly, NDG had both a possessory interest and a proprietary interest in the buildings and could grant a security interest in the buildings themselves and not just in its leasehold interest in the buildings. His Honour (at [17]) rejected the submission that, as NDG had only a possessory interest in the buildings, it could not, by means of the debenture, confer on the bank a right to sell, explaining (at [18]-[19]):
A lessee of goods may, by virtue of its possessory interest, grant a security interest in the goods. Section 43 … provides that a debtor has rights in goods leased to the debtor. A security interest can therefore attach to the lessee’s interest in the goods …
The consequences of this to the lessor will differ according to the term of the lease. In the case of a lease for a term of more than one year, a security interest is deemed to be created by s 17(1)(b) regardless of the identity of the person who has title to the collateral. As Gedye, Cuming and Wood, Personal Property Securities in New Zealand (2002), para 40.3.1 put it, the lease is treated as a security agreement and the lessee is treated as the owner of the leased goods for registration and priority purposes. If the lessor fails to register its interests, it loses priority to a perfected security interest over the leased goods …
[29]     His Honour then referred to Canadian authority (including Re Giffen and International Harvester Credit Corporation of Canada v Touche Ross Ltd (1986) 30 DLR (4th) 387) and scholarship as confirming that analysis, and continued (at [28]):
The rights of a lessee in leased goods referred to in s 40(3) of the Act are not therefore confined to the lessee’s possessory rights. As against the lessee’s secured creditors, the lessee has rights of ownership in the goods sufficient to permit a secured creditor to acquire rights in priority to those of the lessor. The conceptual basis for this is explained in an article by Bridge, Macdonald, Simmonds and Walsh, ‘Formalism, Functionalism and Understanding the Law of Secured Transactions’ (1999) 44 McGill LJ 567 at pp 602-603. The authors reject the thesis that for the purpose of art 9 of the United States Uniform Commercial Code and the Canadian legislation, a creditor’s interest in collateral attaches only to the debtor’s possessory rights. They go on to say: 
‘The internal logic of the Article 9 and PPSA priority regime is premised on a rejection of derivative title theory in favour of registration as the principal mechanism for ranking priority both among secured creditors and as between the secured creditor and the debtor’s general creditors including the trustee in bankruptcy. To give effect to this intent, “rights in the collateral” must be understood as requiring a mere bare right to possession or a power to convey a greater interest than has the debtor, a point confirmed in PPSA jurisprudence and expressly stated in some of the more recent PPSAs. On this interpretation, ostensible ownership — in the radical sense of bare possession or control of the collateral — has effectively replaced derivative title for the purposes of determining the scope of the secured debtor’s estate at the priority level. Thus, by the very act of deeming a true lease to be a PPSA security interest, ownership in the leased assets is effectively vested in the lessee as against the lessee’s secured creditors and trustee in bankruptcy.
[30]     In New Zealand Bloodstock Ltd v Waller [2006] 3 NZLR 629, SH Lock (NZ) Ltd held a debenture, granted in 1999, over the assets of Glenmorgan Farm Ltd, and registered its interest on the day on which the PPSA commenced, 1 May 2002. In 2001, Glenmorgan leased from New Zealand Bloodstock Ltd a stallion, “Generous”, title to which remained with NZ Bloodstock, which did not register its interest. In 2004, NZ Bloodstock terminated the lease and repossessed Generous; shortly thereafter Lock appointed Messrs Waller and Agnew receivers of Glenmorgan under the debenture. The receivers claimed that Lock was entitled to priority under the PPSA and sued NZ Bloodstock for possession of Generous. The New Zealand Court of Appeal held that the lease, having been for a term of more than one year, amounted to a security interest; that for the purposes of s 40 Lock had given value and Glenmorgan had rights in Generous, and the security was enforceable against NZ Bloodstock. As Lock’s security interest had been perfected by registration, it took priority over the competing security interest of NZ Bloodstock, as with respect to priority of competing security interests, the principle nemo dat quod non habet was ousted by the PPSA.
[31]   	Robertson and Baragwanath JJ said (at [54]) that because the lease was for a term of more than one year, then for the limited purpose of priority of securities, the contractual language of the agreement to lease (which provided that title to Generous would remain with NZ Bloodstock) was overridden by statute, and instead of its previously inviolable title to the stallion, NZ Bloodstock was deemed to have a statutory “security interest”, which was liable to be overridden by a competing security interest. Their Honours found the policy underlying that result in the New Zealand Law Commission’s report (at p 89):
		LEASES FOR A TERM OF MORE THAN ONE YEAR
	In practical and legal effect, many commercial leases are indistinguishable from hire purchase agreements or conditional sale contract. They create the same degree of apparent ownership which justifies the traditional regulation of chattel mortgages and charges as well as the proposed regulation of title-based securities and assignments.
[32]   The Commonwealth Parliament, in enacting legislation that was modelled on the New Zealand and Canadian legislation, should be taken to have intended the same approach, which was by then well-established in Canada and New Zealand, to apply.
[33]   	In the General Security Deed, Fast was defined as the “Secured Party”, and Maiden was defined as the “Grantor”. By clause 2, Maiden granted to Fast a “security interest” in the Personal Property to secure the due payment of the “Secured Moneys”. Pursuant to clause 1.1, “Personal Property” means “all of the Grantor’s assets (whether owned legally or beneficially) undertakings and present and after-acquired property of any kind (including a licence) and includes all personal property in which the Grantor has rights, whether now or in the future, including but not limited to the serial numbered collaterals listed in Schedule 1 and the plant and the equipments listed in Schedule 2”. “Secured Moneys” means “all of the Grantor’s indebtedness to the Secured Party (including, for the purposes of s 18(4) of the PPSA, future advances)”. “Secured Property” means “all Personal Property and all other Property, wherever situated”. The Caterpillars were all listed in the schedules: the 930 as Item 15 of Schedule 1; the 330 as Item 18 of Schedule 1; and the 320 as Item 35 in Schedule 2.
[34]   	Accordingly, the General Security Deed was agreement by which an interest in personal property that secures payment or performance of an obligation was created; it was a “security agreement”, and the interest it created in favour of Fast was a “security interest”, within the meaning of PPSA. Pursuant to s 19(2), Fast’s security interest attached to the Caterpillars when it gave value for its security interest by advancing the funds referred to in the Loan Agreement and General Security Deed. Once Fast’s security interest had attached to the Caterpillars, it was enforceable against Maiden pursuant to s 19(1).”
[61]	Accordingly, the applicant states that if and when the refund comes into existence, Moreton will own it at law and:
(a)	Moreton will have rights in the refund in the sense described in section 19(2) of the PPSA; 
(b)	as Moreton will have rights in the refund, on its coming into existence the refund will be attached by Melgear’s security interest (assuming such attachment is not prevented by effectuation of the DOCA); and 
(c)	beneficial ownership of the refund by Moreton is not necessary for attachment under section 19(2) of the PPSA. 
[62]	I note that the applicant refers to several Canadian cases in his submissions which he says is appropriate considering the PPSA was modelled on the Saskatchewan Personal Property Security Act 1993, albeit with numerous departures from that model. For example, the applicant refers to Farm Credit Canada v K&R Poultry Ltd as an example of attachment of a security interest to after-acquired property where the grantor only had legal title to the collateral. 
[63]	In addition to the operation of sections 18(3) and 19(2) of the PPSA, the applicant refers to the concept of a security interest in after-acquired property being an inchoate proprietary interest in the future property.  
[64]	In Royal Bank of Canada v Radius Credit Union Ltd, the Supreme Court of Canada held that a security interest in after-acquired property under the Saskatchewan Personal Property Securities Act 1993 was an inchoate proprietary interest in the after-acquired property.  
[65]	As to the effect of a purported immediate assignment of an expectancy, in Booth v The Commissioner of Taxation of the Commonwealth of Australia, Toohey and Gaudron JJ at 177 adopted the description given in Jordan’s Chapters on Equity in New South Wales, 6th ed (1945) at pp. 51-52:
“In the interval between the making of the agreement and the acquisition of the property by the assignor, the interest of the assignee is not contractual merely, but he has, as between himself and the assignor, a prospective interest in the property to be acquired which has some of the incidents of a proprietary right.”
[66]	In support of its position the applicant refers to the following matters:
(a)	Redman v Permanent Trustee Co of New South Wales Ltd, where Griffith CJ and Barton J stated at 91, the “assignee of an equitable interest, even for valuable consideration, takes subject to all the equities and infirmities of his assignor’s title”; 
(b)	Royal Bank of Canada v Sparrow Electric Corp, where the relevant contest was between a security interest in inventory and a deemed trust imposed by tax legislation and it was held that:
(i)	upon attachment, a security interest is a fixed and specific charge over the collateral; 
(ii)	“a fixed charge over all present and future inventory represents a proprietary interest over a dynamic collective of present and future assets”; 
(iii)	“In effect, the fixed and specific charge gives to the secured creditor the title (subject, of course, to the debtor’s equitable right of redemption) to the present inventory of the debtor, as well as the after-acquired inventory of the debtor.  In this way, the secured creditor becomes the legal owner of the inventory as it comes into possession of the debtor.”; and 
(iv)	“Thus, in the present case, the inventory which was subject to the liquidation sale belonged in law to the respondent bank: both under its GSA [general security agreement] and its BAS [Bank Act security] the bank held a fixed charge over Sparrow’s inventory.  As such, all that Her Majesty’s beneficial interest could attach to, before its sale, was Sparrow’s equity of redemption in the property.”
(c)	where the relevant contest between a security interest and some other interest cannot be determined by applying PPSA priority rules, the approach to be taken is to treat the security interest as a legal interest and apply general law principles to determine the contest;
(d)	in a contest between a legal interest and a later equitable interest in property the holder of the legal interest will generally have priority unless there is some special factor that would make it inequitable for them to take advantage of the legal interest; and 
(e)	there is nothing inequitable about the security interest of Melgear prevailing over the later equitable interest of Elks Co; Mr Elks, the sole director of Elks Co, was a signatory to the Secured Debenture Deed by which the security interest was created.  
[67]	Ultimately, the applicant states that an expectancy is a species of future property which, if it falls in, will be after-acquired property within the meaning of the Secured Debenture Deed to which the security interest granted by the Secured Debenture Deed will attach.  

Consideration  
[68]	The claims being pursued by Moreton in the Tribunal are mere expectancies and not property.  
[69]	An expectancy is a right or title in property which one has not yet acquired and lacks a legal right to acquire but which one may (or may not) acquire in future. 
[70]	The refund was, and still is, an expectancy and if it comes into being, then the issue is whether the refund will be after-acquired property the subject of the security interest granted by Moreton.  
[71]	The point of contention is whether the refund will:
(a)	become property of Moreton and therefore the security will attach to it (the applicant’s position); or
(b)	automatically be assigned in equity to Elks Co without ever becoming property of Moreton (the respondents’ position).
[72]	The applicant submits that:
(a)	Melgear’s security interest in after-acquired property was an infirmity restricting what Moreton could agree to assign to Elks Co;
(b)	upon attachment, Melgear’s security interest in the refund will be a legal interest in the refund; and
(c)	Melgear’s legal interest will have priority as in a contest between a legal interest and a later equitable interest in property the holder of the legal interest will generally have priority.   
[73]	The applicant’s position is founded upon Moreton granting a security interest in its interest in any expectancy to Melgear under the terms of the Secured Debenture Deed and the expectancy will be after-acquired property (within the meaning of the Secured Debenture Deed) to which the security interest granted by the Secured Debenture Deed will attach.
[74]	The meaning of the terms of the Secured Debenture Deed establishes the boundaries of Melgear’s security interest. 
[75]	In my view, Melgear’s security interest, pursuant to the terms of the Secured Debenture Deed, has not, and cannot, attach to a mere expectancy and if the refund comes into existence: 
(a)	it will automatically, and immediately, be assigned in equity to Elks Co without ever becoming property of Moreton; 
(b)	it will be held by Moreton on bare trust for Elks Co to the extent necessary to complete the legal assignment to Elks Co; and 
(c)	the security interest will not “attach” to the refund within the meaning of section 19(2) of the PPSA as Moreton in its own right, as distinct from it acting as bare trustee, will not have any rights in the refund. 
The nature of Melgear’s security interest
[76]	The Secured Debenture Deed can only be effective in accordance with its terms.  
[77]	The Secured Debenture Deed sets out the nature of Melgear’s security interest whereby Moreton granted a security interest in its secured property to Melgear as security for payment of amounts due by the debenture holders. 
[78]	The meaning of these terms establishes the agreement as prescribed by the Secured Debenture Deed with the following consequences:
(a)	“security interest” means an interest in personal property provided for by a transaction as set in section 12 of the PPSA;
(b)	section 10 of the PPSA sets out the meaning of personal property; and 
(c)	“secured property” means all of the present and after-acquired property and includes anything in respect of which the Security Provider has at any time sufficient right, interest or power to grant a Security Interest.
[79]	The claims being pursued by Moreton in the Tribunal are expectancies; they are not property and do not constitute a right or an entitlement.  As discussed above, an expectancy is a right or title in property, which one has not yet acquired and lacks a legal right to acquire but which one may (or may not) acquire in future.
[80]	If an expectancy is realised, then property may come into existence. In this case, if Moreton succeeds in its claims in the Tribunal, the refund, being personal property, may come into existence.
[81]	However, until the refund comes into existence, Moreton’s claims in the Tribunal remain a ‘mere expectancy’ and are not property at all.
[82]	The Secured Debenture Deed concerns personal property which does not include an expectancy.    
[83]	Accordingly, pursuant to the terms of the Secured Debenture Deed, Moreton did not grant a security interest in its interest in any expectancy to Melgear. 
[84]	If a party wishes to bargain for the assignment or securitisation of an expectancy they are entitled to do so. 
[85]	In this case, the debenture holders did not do so. They did not obtain an equitable assignment of, or security over, any expectancies (as distinct from property) of Moreton under the security documents.  
[86]	Had Melgear done so in this case, it is likely that its earlier equitable interest by way of an assignment or charge would take priority to the interest obtained by Elks Co under the Deed of Assignment in accordance with the ordinary principles concerning equitable priority, namely that where the equities are equal, first in time shall prevail.  
[87]	However, that the debenture holders did not strike such a bargain. 
[88]	I note that the applicant submits the trustee of the Moreton Security Trust did not need to obtain an equitable assignment of expectancies to take security over the refund, in circumstances where:
(a)	the refund was property Moreton might acquire in the future; and 
(b)	the trustee had a security interest in the after-acquired property of Moreton, which would attach to that property (including the refund) upon Moreton acquiring it.
[89]	However, that submission is circular because it assumes the very conclusions the applicant seeks to prove. 
[90]	The Secured Debenture Deed can only be effective in accordance with its terms, and all the debenture holders bargained for, and all they obtained, was a security interest in Moreton’s secured property which I accept, by the terms of Secured Debenture Deed, did not contemplate expectancies.  
[91]	In such circumstances, there is no basis for the applicant’s claim that Melgear’s security interest somehow attached to the expectancy in question, namely the claims being pursued by Moreton in the Tribunal. The terms of the Secured Debenture Deed put such a claim to bed.    
After-acquired property is not the same as future property
[92]	Pursuant to the Secured Debenture Deed, the security interest granted by Moreton was in respect of its “…present and after-acquired property”. The applicant states that if the refund comes into existence, then it will be after-acquired property the subject of the security interest granted by Moreton in the Secured Debenture Deed.  
[93]	In relation to the meaning of after-acquired property the applicant submits that:
(a)	when, in a security agreement, a grantor grants a security interest in the grantor’s after-acquired property, the after-acquired property the subject of that grant is property which the grantor could hypothetically acquire in the future, not property which the grantor has already acquired; 
(b)	where a security interest is granted with respect to after-acquired property, that after-acquired property is personal property which the grantor may acquire in the future;   
(c)	personal property the grantor acquires in the future is caught and will be attached by the security interest;   
(d)	if an expectancy falls in or future property matures into actual property, then it will be after-acquired property the subject of the security interest; and 
(e)	there is no distinction between a security interest in after-acquired property and a security interest in future property.
[94]	The PPSA states that “after-acquired property” means:
“personal property acquired by the grantor after a security agreement is made”. 
[95]	The PPSA does not define future property, but I note that it is a term that has been used as a synonym for an expectancy. 
[96]	Meagher, Gummow & Lehane's Equity: Doctrines & Remedies refers to future property in the context of mere expectancy: 
“By the terms ‘future property’, ‘mere expectancy’,’spes’ or ‘spes successionis’, what generally is meant is a right or title which one has not yet acquired and lacks a legal right to acquire but which one may acquire in the future.”
[97]	The terms “future property”, “possibilities” and “expectancies” were bundled together in Tailby v Official Receiver Lord Macnaghten, and acknowledged in Palette Shoes Pty Ltd v Krohn in this way:
“An assignment of future debts obtains its efficacy from the doctrines of equity. In Tailby v Official Receiver Lord Macnaghten stated the principles, which he described as well known. “It has long been settled,” he said, “that future property, possibilities and expectancies are assignable in equity for value.””
								[Citations omitted] 
[98]	Accordingly, the phrase “future property”, properly construed in the context of equitable assignments, does not contemplate “property” at all but rather the equitable notion of an expectancy.   
[99]	In this case, the security interest granted by Moreton was in respect of its “present and after-acquired property”. 
[100]	Section 18(2) of the PPSA states that “[a] security agreement may provide for security interests in after-acquired property.”    
[101]	The applicant refers to Re Antqip Hire Pty Ltd (in liq), where Brereton JA considered the consequences of section 267 of the PPSA in relation to a security agreement and security interest:
“[54]  Importantly for the present issue, PPSA, s 267A, supplements s 267 by providing for the situation where, although a security agreement was entered into before one of the critical times referred to in s 267, the security interest only attaches to collateral after that time. It provides:
		Vesting of security interest 
(1) A security interest vests in the grantor when it attaches to the collateral if: 
(a) paragraph 267(1)(a) applies in relation to the grantor; and 
(b) before the time (the critical time) mentioned in paragraph 267(1)(b), the grantor enters into a security agreement with the secured party that provides for the secured party to take a security interest in collateral from the grantor; and 
(c) at the critical time: 
(i) the security interest has not attached to the collateral; and 
(ii) there is no registration that would perfect the security interest when it attaches to the collateral; and 
(d) after the critical time, the security interest attaches to the collateral; and 
(e)  at the time of attachment: 
(i) the security interest is unperfected; or 
(ii) if the security interest is perfected, it is perfected only by a registration for which the registration time is after the critical time.
[55]   	Section 267A would catch the situation where a company, before a relevant insolvency event, enters into a security agreement in respect of future property which only comes into existence after the relevant insolvency event, whereupon the security interest attaches. If, at the time of attachment, the security interest is either unperfected, or perfected only by a registration made after the critical time, the security interest will vest in the grantor on attachment.”
[102]	However, it is important not to take these passages out of context. 
[103]	Antquip does not support the concept of a security interest existing before attachment.  
[104]	Brereton JA makes it clear that a security interest is only enforceable against the grantor in respect of collateral if the security interest has attached with the secured party having no security interest in the collateral until it has attached: 
“[49]   As I have foreshadowed, the time “when the security interest arises” for the purposes of s 588FL(2)(a) is a different concept from the time when “the security agreement that gave rise to the security interest came into force” referred to in s 588FL(2)(b)(ii). A security agreement will usually come into force when it is executed, as distinct from when the security interest attaches or becomes enforceable. However, the security interest does not necessarily arise at that time. Neither the CORPA nor the PPSA defines when a security interest arises. However, a security interest is only enforceable against a grantor in respect of collateral if the security interest has “attached” to the collateral. The secured party has no security interest in the collateral until it has “attached”. PPSA, s 19, relevantly provides:
Attachment required for enforceability 
(1) A security interest is enforceable against a grantor in respect of particular collateral only if the security interest has attached to the collateral. 
Attachment rule 
(2) A security interest attaches to collateral when: 
(a) the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party; and 
(b) either: 
(i) value is given for the security interest; or 
(ii) the grantor does an act by which the security interest arises. 
Time of attachment 
(3) Subsection (2) does not apply if the parties to a security agreement have agreed that a security interest attaches at a later time, in which case the security interest attaches at the time specified in the agreement.
[50] 	Thus a security interest “attaches” to collateral when the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party; and either value is given for the security interest; or “the grantor does an act by which the security interest arises,” unless the parties have agreed that the interest attaches at a later time, in which case it attaches at that later time.
[51] 	Importantly, as a security interest cannot attach to collateral until the grantor has rights in it, a security interest over after-acquired property will only attach when the grantor acquires the property or the necessary rights. Under the PPSA, there is no longer any requirement for appropriation, and a security interest in after-acquired property attaches without any specific appropriation by the grantor.” 
[Citations omitted]
[105]	After-acquired property in the context of the PPSA is personal property which is acquired by a grantor after a security agreement is made. 
[106]	It may be correct to say that there is no distinction to be drawn between an expectancy and future property. However, it is incorrect to say that there is no distinction between an expectancy and after-acquired property. An assignment of an expectancy operates in a completely different manner to the assignment of property. It is notable that within the bounds of equity: 
(a)	the assignment of a mere expectancy is said to represent a special example of the equitable maxim ‘that equity regards as done that which ought to be done; and 
(b)	the right of an assignee of a mere expectancy is “a right of a higher or different kind from a mere contractual right”.  

Melgear’s security interest will not ‘attach’, within the meaning of section 19(2) of the PPSA, to the refund
[107]	In the event that the refund comes into existence, Melgear’s security interest will not ‘attach’, within the meaning of section 19(2) of the PPSA, to the refund. 
[108]	This result is because of how:  
(a)	equity operates with respect to the assignment of expectancies; and  
(b)	attachment works under the PPSA.  
[109]	Where there has been an equitable assignment of a mere expectancy for value, upon the expectancy being realised and property coming into existence, that property:
(a)	is instantly assigned to the assignee who instantly becomes the 100% beneficial owner of the property; and  
(b)	(to the extent necessary) is held on bare trust by the assignor for the sole purpose of completing any legal transfer to the assignee.   
[110]	The position was summarised in Meagher, Gummow & Lehane's Equity: Doctrines & Remedies at [6-320] as follows:

“It is easy enough to understand the basis of the statement that the right of the assignee, even before the property is acquired, is a right of a higher or different kind from a mere contractual right. If it were merely a matter of contract, the contract could only be one obliging the ‘assignor’, when the property was acquired, to assign it: that is, a contract under which something was required to be done to complete the assurance of the property. But the assignment operates automatically, immediately the property is acquired, and without any further act on the part of the assignor. 

…. 

What is the exact nature of the assignees rights before the property comes into existence? Authority establishes that it is more than a right of contract. But it cannot at that stage be an interest in property because there is no property in existence, or in the hands of the assignor, to which it can attach. That problem remains unresolved. It may be rationalised as a very special application of the maxim that equity regards as done that which ought to be done, the assignor being still bound in conscience by virtue of his earlier receipt of consideration from the assignee. 
… 
It must, in any event, be taken that Re Lind, and in particular the reasoning just described, is to be regarded as authoritative in Australia. In Palette Shoes Pty Ltd v Krohn, Dixon J said:

“But, although the matter rests primarily in contract, the prospective right in property which the assignee obtains is a higher right than the right to have specific performance of a contract, and it may survive the assignor's bankruptcy because it attaches without more eo instanti when the property arises and gives the assignee an equitable interest therein.”
[Citations omitted; emphasis added]
[111]	Accordingly, to the extent the refund ever comes into existence, it will never become property of Moreton. Such a position is consistent with Re Anroma Pty Ltd, where McPherson JA stated at 152 to 154: 
“There can to my mind be no doubt that this is the true effect of applying the principle in Holroyd v. Marshall. It is implicit in Lord Macnaghten’s statement in Tailby v. Official Receiver cited above that equity regards the contract as 35 binding on the conscience of the assignor “and so binding the subject-matter of the contract when it came into existence”. It is made explicit in the decision of the Court of Appeal in England in Re Lind; Industrials Finance Ltd v. Lind [1915] 2 Ch.345, at 360, where Swinfen Eady L.J. explained the position as follows “… an assignment for value of future property actually binds the property itself directly it is acquired – automatically on the happening of the event, and without any further act on the part of the assignor – and does not merely rest in, and amount to, a right in contract, giving raise to an action. The assignor, having received 45 the consideration, becomes in equity, on the happening of the event, trustee for the assignee of the property devolving upon or acquired by him, and which he had previously sold and paid for.” It is this conception that underlies the statement that the prospective right in property which the assignee obtains is a “higher right” than the right to have specific performance of a contract. See the foregoing passage cited with approval by Dixon J. in Palette Shoes Pty Ltd v. Krohn at 27. See, too, what was said by Latham C.J. in the same case at 16–17. 
For Elders’ purpose in the present case it is, of course, essential that the equitable interest claimed should never have vested, however briefly, in the Company. If it did so, it became “property of the company” on which there was momentarily scope for s.368(1) to operate. But it is clear from Re Lind, and statements in the other decisions referred to that the principle extends even so far. In Palette Shoes Pty Ltd v. Krohn, at 27, 15 Dixon J. makes the point when he describes the proprietary right of the assignee as attaching “without more eo instanti when the property arises and gives the assignee an equitable interest therein”. In the ordinary course, and, apart from the transaction here in question, the leasehold interest would have passed from the Crown to the Company at its commencement on 1 December 1985. In consequence of cl.7 of the deed of 1 November 1984 and of consideration advanced by Elders under it, equity intercepted that interest so that at the instant it arrived, if not before, the Company was transformed into a trustee of the term quoad the equitable interest of the mortgage. To that extent the equitable interest was diverted to Elders, never vesting in the Company at all, or vesting in it legally but not beneficially. On that footing it never was “property of” the Company that attracted s.368(1). 
In case it might be thought that in the course of its journey to Elders there may have been a scintilla temporis or fragment of time during which the relevant equitable interest rested with the Company, it is finally necessary only to refer to the decision in a similar context of Herring C.J. in Re Row Dal Constructions Pty Ltd [1966] V.R. 249. In that case the bank took from a company, which later went into liquidation, an assignment of moneys to become due to the company from a local authority. In dismissing an application by the liquidator for a declaration that three sums received by the bank from the local authority were avoided as preferences in the winding up, His Honour, after referring to the principle in Tailby v Official Receiver, proceeded at 254:
“Similarly in the present case the three sums of money referred to in the summons never really belonged to the company. The moment they became due and payable, they belonged to the bank. There was consequently, so far as they were concerned, no payment to the bank of the company’s money. The bank was merely receiving choses in action assigned to it on 7 March 1962, in which it had precisely the same right and interest as if they had actually belonged to the company and been within its disposition and control at the time when the assignment was made.””
No attachment under section 19 of the PPSA 
[112]	As noted, to the extent the refund ever comes into existence, it will never become property of Moreton. 
[113]	However, should the expectancy materialise, and a refund is paid to Moreton, then Moreton will hold the refund as bare trustee for the sole purpose of effecting a legal transfer of the refund to Elks Co but will never have any rights of its own to the refund.  
[114]	Further, to the extent that any refund is paid to Moreton, Melgear’s security interest will not attach to the refund in any event.  
[115]	The effect of the assignment is that Moreton, in its own right, will never have rights in the refund and section 19(2) of the PPSA is not engaged.   
[116]	To the extent it may obtain any rights in future, it will only obtain rights in a capacity as bare trustee for the purposes of transferring legal title to the refund to Elks Co.  
[117]	Such a position is consistent with Carter Holt Harvey Wood Products Australia Pty Ltd v Commonwealth, where Gordon J stated that property held by a corporation as bare trustee is not property of the corporate trustee. CGU Insurance Ltd v One.Tel Ltd (In liq) summarised the nature of a bare trustee in this way: 
“The trustee of a bare trust has no interests in the trust assets other than those which exist by reason of the office of trustee and the holding of legal title. Further, the trustee of a bare trust has no active duties to perform other than those which exist by virtue of the office of the trustee, with the result that the property awaits transfer to the beneficiaries or awaits some other disposition at their direction.” 
[118]	Even if the refund does come into Moreton’s possession and is not immediately transferred by the Commissioner to Elks Co:
(a)	the refund will not form part of Moreton’s “Secured Property” within the meaning of the Secured Debenture Deed because: 
(i)	the definition of Secured Property in the Secured Debenture Deed only extends to Moreton’s “present and after-acquired property”; 
(ii)	the refund will either pass directly to Elks Co or be held by Moreton on bare trust, such that it will never be the property of Moreton; and, in any event  
(b)	Melgear’s security interest will never attach to the refund because Moreton will never have “rights in the [refund]” for the purposes of 19(2) of the PPSA. 
[119]	Accordingly, if the refund comes into existence: 
(a)	it will automatically, and immediately, be assigned in equity to Elks Co without ever becoming property of Moreton;  
(b)	it will be held by Moreton on bare trust for Elks Co to the extent necessary to complete the legal assignment to Elks Co; and  
(c)	the security interest will not ‘attach’ to the refund within the meaning of section 19(2) of the PPSA as Moreton in its own right, as distinct from it acting as bare trustee, will not have any rights in the refund.  
[120]	I do not accept that such an outcome would have a serious adverse commercial impact as contended by the applicant.   
[121]	I note that for the equitable assignment of an expectancy to occur, the assignment must be for value.  
[122]	In this case the assignment was for value as:
(a)	Moreton received value of $100,000 under the Deed of Assignment in exchange for the assignment of its claims in the Tribunal and any eventual refund; and 
(b)	that payment of $100,000 became property of Moreton and, therefore, subject to Melgear’s security interest which attached to the $100,000 paid by Elks Co upon Moreton acquiring the same.  
[123]	It is not contentious that the assignment in this case was for value. 
[124]	It is the provision of value which binds the conscience of the assignor to affect the immediate transfer of any future property which comes into existence to the assignee instantly.   
[125]	If the applicant’s construction was accepted, then secured creditors may be able to ‘double dip’ and obtain a windfall by:  
(a)	obtaining the benefit of any ‘value’ paid by a grantor in exchange for the equitable assignment of a mere expectancy; and subsequently,
(b)	also claim the benefit of any property which came into existence as a result of the expectancy being realised.   
[126]	Such an outcome would be inequitable and inconsistent with the rationale for the rule set out by Swinfen Eady L.J. in Re Lind as follows at 360:

“It is clear from these authorities that an assignment for value of future property actually binds the property itself directly it is acquired—automatically on the happening of the event, and without any further act on the part of the assignor— and does not merely rest in, and amount to, a right in contract, giving rise to an action. The assignor, having received the consideration, becomes in equity, on the happening of the event, trustee for the assignee of the property devolving upon or acquired by him, and which he had previously sold and been paid for.” 
Conclusion 
[127]	The assignment issue and the DOCA issue raised by the respondents are independent and discrete from each other. Accordingly, if the respondent’s submissions are accepted on either issue, then the controversial declarations cannot be made.  
[128]	In this case, I accept the respondent’s submissions in relation to the assignment issue and that there is no basis for the making of the second and third declarations sought by the applicant. 
[129]	That is the end of the matter. 
[130]	As I have found in favour of the respondents it is not necessary to consider the DOCA issue where the applicant contends that, notwithstanding the release of Melgear’s debt under the DOCA, as a consequence of the terms of the DOCA and section 444D(2) of the Act: 
(a)	Melgear may still enforce its security interest to recover that debt; and 
(b)	Melgear is treated or deemed as having its debt still in existence (despite the release) for the purpose of enabling Melgear to recover that debt by realizing or otherwise dealing with its security interest.
[131]	In advancing this case, the applicant seeks to: 
(a)	distinguish and not follow Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd;
(b)	find that the decision of Black J in Bluenergy Group is wrong and ought not be followed; and 
(c)	distinguish Blackbird First Mortgage Corporation Pty Ltd v Jacobs.   
[132]	The applicant pursued this herculean task with a line-by-line analysis of these cases.  
[133]	The applicant urges me to engage with this issue, notwithstanding the respondents are successful on the assignment issue as:
“…given that I come here and ask your Honour to make findings that Justice Black got it wrong in Blue Energy, then there’s every prospect of the matter going upstairs.”
[134]	However, in the circumstances, it is unnecessary and unproductive. 
[135]	In my view, considering the conclusion I have reached in relation to the assignment issue, this is not the appropriate vehicle to decide the DOCA issue as raised by the applicant. Even if I found in favour of the applicant on this issue this would not change the outcome of this case. 
[136]	The parties are to provide me with a form of order consistent with these reasons by 10am on 1 May 2026. 
Costs
[137]	Costs ordinarily follow the event. 
[138]	I will give the parties an opportunity to consider these reasons before they are required to file and serve short written submissions on the question of costs. I encourage the parties to agree on an order for costs.  
[139]	If this cannot occur, the parties should, by 1 May 2026, file and serve written submissions as to costs. 
[140]	If it is appropriate, I will then deal with the question of costs on the papers, unless either party requests a hearing. To facilitate that process, I will adjourn the question of costs to a date to be fixed.