Latest Forge decision reinforces power of Personal Property Securities Act (PPSA)
February 19, 2026
Author name
Forge Group Power Pty Limited (in liquidation) (receivers and managers appointed) v General Electric International Inc. [2016] NSWSC 52
A recent Court decision reinforces the critical need to register security interests over personal property under the Personal Property Securities Act (PPSA) to avoid losing that property. A simple failure to register under the PPSA led to Forge Group Power Pty Ltd (Forge) gaining about $50,000,000 worth of mobile gas turbine generator sets, despite not being the ‘true’ rightful owner.
Background
General Electric International Inc. (GE) and Forge entered into a contract for the lease of turbine generators on 5 March 2013 as part of the construction of a temporary power station near Port Headland in Western Australia.
In what would become a fatal omission, the generators were not registered on the PPSA’s Registry in accordance with the PPSA (a relatively quick and inexpensive, albeit unnecessarily confusing, process).
On 11 February 2014 Forge went into voluntary administration and subsequently liquidation on 18 March 2014.
Forge, through its liquidators, sought declarations from the NSW Supreme Court that GE’s interests in the generators vested in Forge immediately before the appointment of the administrators pursuant to the provisions of the PPSA. GE raised a number of defences in the action, one being particularly desperate. GE’s defences ultimately failed.
The Outcome
On 11 February 2016 the Court found that the lease for the generators was a “PPS Lease”, a security interest artificially created for certain lease arrangements by and for the purposes of the PPSA. As a result, GE was required to register that security interest in accordance with the PPSA to protect that interest in the event of Forge becoming insolvent.
By not registering the equipment, the Court found that GE’s interests in the generators had vested in Forge immediately before Forge went into administration. The proceeds that will come from the sale of the generators will therefore go into the pool of funds to be distributed amongst Forge’s numerous creditors.
This decision highlights:
- why the PPSA is widely perceived to ignore common-sense in favour of producing technical and grossly unreasonable results;
- the critical importance to register security interests over personal property accurately and within the PPSA’s statutory timeframes; and
- the need for proper due diligence when purchasing a business to ensure its assets are adequately protected under the PPSA.
For further information or guidance regarding the PPSA, please contact Phil at (08) 9321 5451

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