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Selected cases

Full Court of the Federal Court of Australia · [2026] FCAFC 60

SCL AUS v Kirkalocka Gold SPV

A Full Federal Court insolvency case about royalty deed rights, contingent claims, caveats and the effect of a deed of company arrangement.

Full Court of the Federal Court of Australia8 May 2026

Plain-English explainers, not legal advice. Check the linked official source before you rely on a specific section, and get advice for your situation.

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Quick read

  • A deed of company arrangement can reshape contract rights that look future-facing.
  • A Full Federal Court insolvency case about royalty deed rights, contingent claims, caveats and the effect of a deed of company arrangement.

Use this to check

  • Future royalties can be contingent claims in an administration or DOCA.
  • Security-style protections, caveats and transfer restrictions may be treated with the underlying monetary claim.
  • Contract rights should be reviewed quickly when a counterparty enters external administration.

Decision snapshot

  1. 1

    What happened

    • SCL had a royalty deed with Kirkalocka, the owner of a Western Australian gold project.
    • The deed gave SCL rights to royalties on gold produced from the project and rights connected with caveats and transfers of the mining lease.
    • Kirkalocka later became subject to a deed of company arrangement.
    • The dispute was whether SCL's future royalty and associated rights were claims bound or released by the DOCA, even though future mining was uncertain and Kirkalocka had discretion whether to mine.
  2. 2

    What the court had to decide

    • The Full Court considered whether SCL's royalty rights and associated caveat and transfer covenants under a royalty deed were claims bound by a deed of company arrangement under s 444D of the Corporations Act.
  3. 3

    What the court decided

    • The Full Court allowed the appeal in part.
    • It accepted that the future royalty obligation was a contingent claim bound by the DOCA, but it set aside and replaced a declaration concerning SCL's caveat and transfer-related rights.
    • Costs submissions were left to be filed.

Practical impact

Practical read

  • A deed of company arrangement can reshape contract rights that look future-facing.
  • If your business relies on royalties, caveats or transfer restrictions, insolvency events can affect more than unpaid invoices.

Useful next steps

  • Future royalties can be contingent claims in an administration or DOCA.
  • Security-style protections, caveats and transfer restrictions may be treated with the underlying monetary claim.
  • Contract rights should be reviewed quickly when a counterparty enters external administration.
  • Royalty and earn-out clauses should say what happens on insolvency, transfer and restructuring events.
  • Identify royalties, earn-outs and deferred consideration before a counterparty administration vote.

Practical read

This case is a reminder that insolvency law can reach into contract rights that do not look like ordinary unpaid invoices. SCL's royalty rights depended on future mining and production. That made them contingent, but not irrelevant.

The Full Court held that the royalty payment obligation was a contingent claim for DOCA purposes. It also dealt with rights to maintain caveats and control transfers under the royalty deed. In practical terms, businesses cannot assume a future royalty, security or transfer-control right will sit outside a restructuring just because no payment is due today.

For small and scaling businesses, the lesson is to review insolvency triggers in important contracts. Royalty deeds, earn-outs, PPSR security, caveats, licences and transfer covenants should be checked before a counterparty enters administration, not after a DOCA has already been voted through.

Checks to run

Key points

  • Identify royalties, earn-outs and deferred consideration before a counterparty administration vote.
  • Check whether caveats, PPSR registrations or transfer restrictions support a payment obligation.
  • Review DOCA proposals for releases of contingent and future claims.
  • Get legal help before voting on a DOCA that affects key contract rights.
  • Draft royalty deeds with insolvency, transfer and enforcement mechanics in mind.

Key takeaways

  • Future royalties can be contingent claims in an administration or DOCA.
  • Security-style protections, caveats and transfer restrictions may be treated with the underlying monetary claim.
  • Contract rights should be reviewed quickly when a counterparty enters external administration.
  • Royalty and earn-out clauses should say what happens on insolvency, transfer and restructuring events.

Related topics

Insolvency & RestructuringContracts & CommercialFinance, Payments & Security

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