In Kirk v Moreton Resources Pty Ltd [2026] QCA 186, the Court of Appeal allowed an appeal by Darryl Kirk, as receiver of Moreton Resources Pty Ltd (Receiver Appointed) (Moreton Resources).

The dispute concerned competing claims to Research and Development tax refunds that might materialise if Moreton Resources succeeds in proceedings commenced by it in the Administrative Review Tribunal against the Commissioner of Taxation (the ART proceedings).

Mr Kirk sought a declaration that he was entitled, as receiver, to maintain, conduct and carry on the ART proceedings for and on behalf of Moreton Resources. He argued that, if Moreton Resources succeeds in the ART proceedings, its right to be paid the refunds, and the refunds themselves when paid (together, the refund property), would be after-acquired property to which the security interest held by Mr Kirk’s appointor (Melgear) would attach by reason of sections 18 and 19 of the Personal Property Securities Act 2009 (Cth) (the PPSA). Melgear’s security interest was a registered security interest in respect of all the present and after-acquired property of Moreton Resources, namely, a registered AllPAAP security interest.

When Melgear appointed Mr Kirk as receiver, Moreton Resources was both in liquidation and administration. Its liquidators had appointed administrators. A deed of company arrangement (DOCA) for Moreton Resources was later executed and then effectuated. Melgear did not vote in favour of that DOCA.

The main respondent to the appeal was MRL Moreton Resources Pty Ltd (MRL), an assignee of the refund property under an agreement to assign made with the liquidators of Moreton Resources more than a year after the registration of Melgear’s AllPAAP security interest. MRL paid the liquidators $100,000 under that agreement. MRL opposed the declaration sought by Mr Kirk, arguing that the refund property would not be attached by Melgear’s AllPAAP security interest if it materialised. This was for two reasons: first, the agreement to assign; and second, the DOCA’s effectuation.

The Court of Appeal, in a unanimous decision, held that if the refund property materialised, it would be after-acquired property to which Melgear’s security interest would attach. The rights of the secured creditor were not defeated by (or postponed to) the rights of MRL as later assignee of the refund property. An AllPAAP security interest attaches automatically when the grantor acquires rights in the collateral. Before then, the absence of attachment reflects the fact that the collateral has not materialised, rather than the absence of a security interest capable of attaching to collateral when it materialises.

Significantly, the Court also found that the effectuation of the DOCA did not prevent the attachment of Melgear’s security interest to property acquired by Moreton Resources after that effectuation. Although the DOCA released the underlying debt, Melgear’s rights under its security were preserved by section 444D(2) of the Corporations Act 2001 (Cth), and the released debt was taken to exist for the purpose of enforcing those preserved rights.

The Court of Appeal declined to follow Black J’s decision in Re Bluenergy Group Ltd [2015] NSWSC 977; (2015) 107 ACSR 373; (2015) 300 FLR 155. There, Black J held that the expression “the security interest” in section 444D(2) meant a security interest that had attached to collateral before the release of debts effected by a DOCA. His Honour’s reasoning for that finding was that the “existence of a continuing security interest extending indefinitely into the future over a company’s after-acquired property, and notwithstanding that a [DOCA] had provided for the release of the secured creditor’s debt, would place a very significant practical obstacle in the way of any future operation of a company that emerged after a [DOCA], including potentially preventing its obtaining new secured finance without the cooperation of its former secured creditor”.

However, Mr Kirk advanced an argument before the Court of Appeal which had not been put before Black J. Mr Kirk submitted that there is a statutory scheme governing whether a security interest may be enforced in corporate insolvency. That scheme is found in three sections: sections 267 and 267A of the PPSA and section 588FL of the Corporations Act. Under that scheme, a security interest which Parliament has decided is to be unenforceable in the external administration of the grantor company vests in the grantor company or will do so when the collateral materialises and it attaches. Accordingly, the expression “the security interest” in section 444D(2) should be understood as meaning a security interest that hasn’t vested in the grantor company and won’t do so under any of those three sections. To give it a narrower meaning would be inconsistent with the statutory scheme. As such, Melgear’s AllPAAP security interest was not one which had vested in Moreton Resources under any of those three sections. Nor would it do so if the refund property materialised.

The Court of Appeal held that the security interest preserved by section 444D(2) included Melgear’s AllPAAP security interest with respect to collateral yet to materialise and, therefore, made the declaration sought by Mr Kirk. The decision confirms that the release of a secured debt under a DOCA does not prevent a security interest attaching when the company later acquires rights in collateral.

The key takeaway is that assets acquired by a company after a DOCA is effectuated may still become secured property and be applied towards a secured creditor’s debt existing at the date of effectuation. A DOCA may release the company from liability for that debt without preventing a surviving security interest from attaching to after-acquired property. 

This distinction is important when drafting and administering DOCAs. Whether a secured creditor may recover from property acquired after a DOCA’s effectuation depends not only on the release of the underlying debt, but also on section 444D(2), the terms of the security, the PPSA attachment rules and whether the security interest has vested (or will vest) in the grantor company.

The decision provides important guidance for lawyers, insolvency practitioners and secured creditors (particularly financiers) on the rights of a company and a secured creditor where property materialises after the effectuation of a DOCA.

If you have any questions about this decision or would like advice on insolvency, restructuring or security interest issues, please contact a member of our Restructuring & Insolvency team.

Disclaimer of interest: Colin Biggers & Paisley acted for the successful appellant, Darryl Kirk, in Kirk v Moreton Resources Pty Ltd [2026] QCA 186.