Sebastian Hams.
An attempt to keep critical infrastructure out of the hands of OneSteel Manufacturing Pty Ltd (OneSteel) administrators from KordaMentha has failed, with a court ruling that the operating infrastructure at the Port of Whyalla comprise fixtures over which the administrators have rights as opposed to being chattel property vesting with the receivers of Whyalla Ports Pty Ltd (WP).
Failing any successful appeal the 221 paragraph decision – which features photographs of the disputed infrastructure – will be a useful guide for rival appointees of sibling subsidiaries bound by deeds of cross guarantee and entwined in obligations both historic and current.
“If an item of property rests on its own weight on the land, it is presumed to be a chattel. The onus of proof then lies on the party asserting that the item is a fixture. Conversely, if an item is affixed to the land otherwise than by its own weight, it is presumed to be a fixture, and the onus of proof lies on the party asserting that it is a chattel.” Justice David O’Callaghan.
On Wednesday Federal court judge David O’Callaghan delivered judgment in Hams v Whyalla Ports Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed), in the matter of OneSteel Manufacturing Pty Limited (Administrators Appointed) (No 2) [2025] FCA 1059.
The decision follows an application brought earlier this year by the OneSteel administrators for a court order declaring that a June 2018 lease OneSteel granted to WP over the portion of land where the port operates is void ab initio, unenforceable and of no legal effect.
In December 2024 WP guaranteed OneSteel’s indebtedness to Golding Contractors Pty Ltd (Golding) and granted Golding a security interest over WP’s property to secure repayment of the amount owed.
Given how troubled the Sanjeev Gupta-controlled group was by late last year it may be that the decision was a tactical move in anticipation of the imminent appointment of external administrators and on April 23, 2025 WP filed a notice of cross claim against OneSteel and its administrators Sebastian Hams, Mark Mentha, Lara Wiggins and Michael Korda.
On June 6, 2025 William Buck’s Michael Brereton, Sean Wengel and Rashnyl Prasad were appointed administrators of WP.
Less than a week later Golding installed McGrathNicol’s Rob Kirman and Rob Brauer as receivers of WP.
Despite the appointment of administrators and receivers the cross claim remained on foot, the argument being that termination of the lease was an act of conversion of WP’s personal property for which it should be compensated by way of damages.
Golding, with claims against WP of more than $130 million, understandably supported the decision and while the KordaMentha foursome have won this round Golding could still have a viable claim, with the damages for conversion question yet to be determined.
Justice O’Callaghan heard the parties’ arguments on that aspect last month before reserving judgment.
But in Wednesday’s decision his honour explored the related question of whether the Port infrastructure identified in the proceedings were fixtures or chattels, describing the ultimate question as “whether, having regard to all of the facts and circumstances, the item was objectively intended to become part of the land to which it was affixed”?
“If an item of property rests on its own weight on the land, it is presumed to be a chattel. The onus of proof then lies on the party asserting that the item is a fixture. Conversely, if an item is affixed to the land otherwise than by its own weight, it is presumed to be a fixture, and the onus of proof lies on the party asserting that it is a chattel.”
The relevant contracts arrangement and agreements between OneSteel and WP which go to the heart of the dispute go back to the days when the Whyalla operations and assets were held under the corporate umbrella of the Arrium Group and it was the nature of those agreements which informed the judge’s view about whether a chattel or fixture be.
” …. it is, in my view, highly unlikely that the Arrium group would have intended at the time of affixation of the Assets that one of its subsidiaries (which, not to labour the point, had no employees or source of income) would be able to insist upon the removal of the Assets which are critical to not only the operation of the Port but also the export of iron ore from the mines in the Middleback Ranges and Southern Iron project,” he said.
“as OneSteel submitted, the Assets were affixed to the ground or otherwise put in place so that the entire site could function safely and efficiently as a system for the movement of iron ore from the tip pocket to the vessels for export.
“The Port had been indefinitely dedicated to that purpose, which is a significant indicium that the object of affixing the Assets to the ground was for the better enjoyment of the land consistently with each of them being a fixture.
“In my view, the contrary position contended for by WP — including that it was “incorporated for the express purpose of separately conducting port and logistics operations” and that the Assets “were affixed … with the objective intention of facilitating WP’s port and logistics operation[s] on land that WP did not own” — is, with great respect, largely artificial,” his honour concluded.
We asked the Kirman and Brauer if they’d made a decision in respect of any appeal but no response was received prior to deadline.
Further reading:
OneSteel VAs fail in contingent claim bid
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