Personal Property Securities Act

What have we learnt so far?

T 1300 RLS LEGAL

E info@resultslegal.com.au

W resultslegal.com.au

Presented by

Karl Hill | Managing Director

BRISBANE | SYDNEY | MELBOURNE

CANBERRA | ADELAIDE | PERTH

Introduction

Trade credit perspective

Rights of Rot creditors

PMSI’s

“All moneys clauses”

Processed and co-mingled

Hirers and lessors

Transitional provisions

Registration

‘Personal Property’

Registration

TRADE CREDITORS’ RIGHTS

• Retention of title (RoT)

• Hirers and lessors of property

• Charges over personal property

Retention of title

“We’re not all that worried about PPS. The only impact to us is retention of title. We’re the owner of the goods anyway, so there won’t be any other security interest we need to compete with.

If anything, we’ll just register if we’re concerned that a debtor is going to end up in trouble.”

National credit manager, large corporate client

The good news

1. RoT claim is a ‘PMSI’ which

creates a ‘Super Priority’.

2. Greater rights in respect of

processed and co-mingled goods.

PMSI interest creates SUPER PRIORITY.

PMSI and ‘all moneys’ clauses

EXPANDED RIGHTS OF RoT CREDITORS

• Processed goods

• Co-mingled goods

• Accessions

Hirers and lessors

PPSA catches hire or lease agreements if they are for:

(a)a term of a year or more;

(b)an indefinite term; or

(c)a term of up to a year that is automatically renewable.

Transitional Provisions

• Single or multiple “Security Agreement(s)”

• Priority rules

Conclusion

Purpose – to formalise and clarify competing rights

Real –v– personal property

RoT creditors are amongst the potential winners

Transitional provisions

Have a clear plan in place for what and how to register (and if you

haven’t registered yet, do so)

Have your terms and conditions reviewed (if you haven’t already)