We’ve inundated you throughout 2011 with information about the PPSA … now it’s finally here!
30 January 2012 sees the much anticipated (especially for us lawyers!) introduction of the new personal property securities register (PPSR).
Although newly introduced in Australia, we can learn from the New Zealand cases as they introduced a PPSR in 2002 where problems arose while everyone was coming to terms with how the new laws would work.
In the case of Graham and Gibson v Portacom New Zealand Ltd [2004] 2 NZLR 528 Portacom New Zealand Ltd (Portacom), a portable toilet hire company, leased portable toilets to NDG Pine Ltd (NDG). Portacom did not intend to pass on the title to the portable toilets under the lease. Portacom did not register its interest in the leased portable toilets on the PPSR. Before the PPSR, it did not need to register its interest. NDG then also borrowed money from HSBC, which HSBC secured by way of a charge over NDG’s assets regardless of how they were held (i.e. ownership or lease). HSBC registered its interest on the PPSR. NDG went into liquidation and HSBC were able to sell the portable toilets and keep the proceeds. HSBC’s registered interest on the PPSR trumped Portacom, even though Portacom were the owners of the portable toilets, never intended to transfer title under the lease to NDG and had retention of title provisions in their agreements. If Portacom had registered their interest, they would have been protected.
From today (30 Jan 2012), anything that would have been registered on the following registers will need to be registered on the PPSR:
• Australian Register of Ships (mortgages only)
• ASIC – Register of Company Charges (including provisional charges)
• Fisheries Register
• Register of Encumbered Vehicles (REVS NSW, QLD, WA, ACT)
• Security Interest of Goods Register (NSW):
• stock mortgages originally registered under the Liens on Crops and Wool and Stock Mortgages Act 1989
• Bills of Sale from 1 January 2000
• current crop mortgages and all other interests registered under the Security Interests in Goods Act 2005
• Register of Co-operative Charges (NSW, QLD, SA, VIC, ACT)
• Bills of Sale Register (including Register of Liens on Crops of Sugar Cane) (QLD)
• Vehicle Securities Register (SA, VIC)
• General Registry Office (SA):
• Bills of Sale Register
• Stock Mortgages and Wool Liens Register
• Liens on Fruit Register
• Register of Vehicle Security Interests (TAS)
• Register of Bills of Sale, Stock, Wool and Crop Mortgages and Co-operative Charges (TAS)
• Register of Liens on Wool and Stock Mortgages (stock mortgages only) (VIC)
• Bills of Sale Register (WA)
• General Register of Deeds and Instruments (ACT)
• Register of Interests in Motor Vehicles and Other Goods (NT)
• Lands Titles Registration and General Registry Office (Bills of Sale and stock mortgages) (NT)
Any supply of goods on credit or on part payment or any lease of personal property, or any retention of title provision, are all interests that can be protected by registration under the PPSR.
In order to validly register on the PPSR, your documents must be in order and allow for registration. Documents that you need reviewed include:
• Agreements as to Security Interests (in assets other than Real Property)
• Personal Guarantees
• Terms and Conditions of Trade
• Credit Applications
• Company Charges
• Long-term and Finance Leases
• Chattel Mortgages
• Retention of Title arrangements
• Lease and Hire-Purchase Finance Agreements
• Receivables Financing, including factoring and sales to securitisation vehicles
• Trade Finance
• Equipment Loans
For further information, contact the Commercial Business & Property Team
