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Cite as: April 2012 86 (04) LIJ, p.77

Businesses that fail to understand how the PPSA will affect them are at risk.

The Personal Property Securities Act 2009 (PPSA) was passed on 14 December 2009. After delays and uncertainties associated with the migration of databases and testing, registrations started on 30 January 2012.

The PPSA introduces rules that will govern how security interests are created and enforced, as well as determining priority between competing interests. It provides a new framework and national online register to deal with the securitisation of personal property interests. It allows for the registration of charges on personal and business property including tangible assets (such as goods, crops and livestock, motor vehicles, paintings, machinery and debtors) as well as intangible assets (such as licences, intellectual property, trademarks, and investment instruments). Personal property also includes interests under guarantees, hire purchase finance agreements, finance leases, debtor factoring as well as retention of title on goods supplied.

The PPSA will result in significant changes to the registration of security interests over personal property. It will also radically change the notion of legal title over such property.

Until recently it was feared that the effective commencement of the PPSA would be delayed beyond its scheduled start date of on or before 1 February 2012. The delay was expected as a consequence of uncertainties associated with the migration of data from existing databases (e.g. ASIC Register, Vehicle Security Registers in each state and territory) to the centralised database that will be administered by the Insolvency and Trustee Service of Australia (ITSA).

The Attorney-General released a determination on 21 November 2011 which detailed the migration time and registration commencement time for the PPSA. Under this determination, the migration time was set for 21 November 2011 and the registration commencement time for 30 January 2012.

Based on an assessment undertaken by the Attorney-General’s department as to the overall readiness for the commencement of the PPSA and the ability to deliver a fully functioning register, concerns regarding date migration and registration processes have now been mitigated and the framework has been rolled out.

To determine whether there were adequate internal systems and procedures in place, businesses were urged to consider the impact of the PPSA on their business, and assess whether trading terms and agreements were PPSA compliant, had been agreed to, adopted and signed off by customers, and how well placed the business was to register interests on the PPSA register.

It is extremely important that businesses not only implement procedures to deal with the PPSA but also ensure that administrative staff are trained to recognise and register security interests over personal property.

There will be far reaching consequences for those individuals and businesses who fail to understand how the PPSA will affect them. Inaction will place their assets at risk.

An example: If your post-PPSA interest in goods supplied under a retention of title has not been registered, then any other priority charge (e.g. bank charge) will take priority over those supplied goods, even though title to those goods may not have passed.

Businesses which have not already done so should seek the assistance of their lawyers and professional advisers to help with the transition to this new regime or risk facing potentially harsh and expensive lessons.

GESS RAMBALDI is a partner in Pitcher Partners’ business recovery and insolvency services division in Melbourne. He can be contacted at ph 8610 5164 or


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