Personal Properties Securities Act 2009 (“PPSA”)
In January 2012 the Personal Property Securities Act 2009 (‘PPSA’) was introduced as a uniform national scheme for registration of security interests in personal property.
The PPSA introduced substantial changes to the law and new concepts to this area.
Most existing registered security interests, such as those registered with ASIC and on the Vehicles Securities Register were transferred (‘migrated’) onto the Personal Property Securities Register (‘PPSR’).
In relation to these migrated securities, clients should follow a ‘Find and Claim’ process to ensure that appropriate information has been provided to the PPSR, in particular, the correct address for service to which notifications are sent from PPSR.
In essence, the PPSA provides that where an interest in personal property secures payment or performance of an obligation, registration is required with certain limited exceptions, to maintain that security over personal property and priority for that security. It is the substance of the transaction which is important, not the form.
In addition to the familiar charges or debentures, there are also certain transactions which are deemed to be security interests where registration is required (where registration would not have previously been required). For example:
- the interest of a consignor who delivers goods to a consignee under a commercial assignment, eg: an artist consigns a painting to a dealer for sale;
- the interest of a lessor or a bailor of goods under a lease for a term of more than one year; or a lease of serial numbered goods for a period of more than 90 days;
- the interest of a vendor who retains a lien over goods to secure payment of moneys under a sales contract.
The PPSR is basically a computer-based system and the procedure for registration can sometimes involve difficulties.
A secured party will need to perfect their security interest by registering a finance statement and certain time limits apply to maintain that security and its priority.
The procedure and technical rules which apply to the scheme are quite complex and legal assistance maybe required to protect the security interest in the personal property.