The Personal Property Securities Act 2009 (Cth) (“PPSA”) came into force on 30 January 2012.
It has been touted as a “one stop shop” for security interests in personal property by overhauling the myriad of approximately 70 pre-existing government acts and registers (ie ASIC Charges, REVS, Bill of Sale) into one searchable national register.
It has brought with it many new terms, concepts and applications. In summary, PPSA applies to everything that is personal property, including:-
- inventory, plant & equipment
- commercial & consumer property
- motor vehicles (including cars, ships, aircraft etc
- intellectual property (copyright, designs, patents, trademarks etc)
- intellectual property licences
- financials (accounts, ADI accounts)
- chattel paper
- documents of title
- intangible property
- investment Instruments; and
- negotiable instruments.
The PPSA will apply where an interest in personal property is granted by one party (the Grantor) to another (the Grantee or Secured Party) secure the payment of a debt or the performance of an obligation. This is usually done by the preparation of a security agreement (either general security agreement or a specific security agreement).
It includes the traditional forms of personal property security (company charges, goods mortgages etc) and also incorporates many new forms of security that were not capable of registration under previous legislation. This includes:-
- suppliers of goods under retention of title arrangements
- payment retentions under a construction contract
- finance and operating leases for a term of more than 1 year
- hire purchase agreements
- consignments (ie where payment is expected only on completed sales)
- leases of goods
- documents that have clauses creating a security interest in personal property can constitute security agreements (eg: a real property mortgage which contains a charging clause covering personal property).
Registration of these instruments (although not mandatory by law) will be necessary to ensure that priority is preserved. Failure to register may mean that the Secured Party loses their priority in respect of other creditors if the item was to be seized to pay other debts.
Our security law department regularly advise our clients in respect of the implications of the PPSA in relation to certain transactions across areas of law including property, commercial, intellectual property, banking and finance, insolvency and disputes.
We can provide practical advice in respect of:
- creating registrations on behalf of our clients and coordinating/instructing businesses with doing this themselves
- providing general advice and/or specific advice to particular business structures to assist with managing the implications of the PPSA
- amending, discharging or removing improper or incorrect security interests from the PPS Register
- review of business documents, such as Leases for personal property, credit applications, supply of goods, trade terms, contracts for sale, purchase or hire of goods, or other documents for transactions involving personal property to ensure compliance with the PPSA
- advising clients in respect of default and enforcement under the PPSA
- acting for or advising insolvency practitioners on PPSA specific matters; and
- advising on or dealing with disputes practically and efficiently.