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The Australian PPSA

Written by Darryl King, PARTNER; on April 2nd, 2012.    

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How does it impact you?

The Australian Personal Property Securities Act 2009 (the Australian PPSA) is now in force. Like its New Zealand equivalent, the Personal Property Securities Act 1999 (our PPSA), the Australian PPSA and PPS Register profoundly change the way that security is taken over personal property. The change will be significant for New Zealand businesses who supply goods to Australia on credit. Set out below is an overview of the Australian PPSA, how it may affect you and what you need to know if it does.

The Australian PPSA – what is it?

The Australian PPSA brings together numerous State, Territory and Commonwealth laws and registers to create a unified system for dealing with security in personal property.  It is very similar to our PPSA in that:

  • a security interest must secure payment or performance of an obligation;

  • if a creditor does not have possession, they must have a written security agreement ;

  • a creditor can perfect their security interest by possession of the personal property in question, or registration on the PPSR; and

  • the concept of title is not relevant.

As in New Zealand, what is important under the Australian PPSA is who is the first to register and perfect their security interest, and who has any type of “super priority”, rather than who has legal title to the personal property in question.

How to register your new security interests

All new security interests should be registered immediately on the PPS Register. You can search the PPS Register and create a new registration online at www.pps.gov.au. If you are familiar with the New Zealand Personal Property Register, you will find that similar information is required to register your security interest in Australia.

If you have a PMSI you have a period of 15 working days to register your interest in Australia (in comparison to just 10 working days in New Zealand). To claim a PMSI, you must record on the financing statement that you claim a PMSI.  Care is required, however, as incorrectly claiming a PMSI in respect of a security interest that is not a PMSI will result in the financing statement being completely ineffective.

Transitional provisions – taking care of your existing security interests

The Australian PPSA contains transitional provisions designed to protect holders of security interests that were registered on the various registers that the Australian PPSA replaced. If these provisions apply to you, you have until 29 January 2014 to ensure your security interest is perfected under the Australian PPSA.  Failure to do so will result in you losing your priority.

What you need to do

If you supply goods on credit to Australia, you will need to start registering your security interests in Australia in a similar manner to the way you register your security interests in New Zealand.

You should also review your current terms of trade or supply agreements and any related financing arrangements you have to ensure they align with the Australian PPSR and enable you to register your security interests.

How we can help you

As with any new legislation, there is a potential for confusion and conflict as individuals and businesses come to terms with the new legislation and take steps to preserve and protect their position. If you need advice on what you need to comply, our Business Law Team can help you get in touch with an Australian lawyer.

 

Disclaimer
The information contained in this publication is of a general nature and is not intended as legal advice.  It is important that you seek legal advice that is specific to your circumstances.
 
All rights reserved © Jackson Russell 2012
Key Contacts

Darryl King 167
Darryl King, PARTNER
Topics: All, Business
 

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