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November 6, 2013

The end of the Personal Property Securities Act transition: what you need to do

At midnight on 31 January 2014 the PPSA transitional period ends. Any security agreements made before 30 January 2012 which continued to exist after that time and which are registrable on the Personal Property Securities Register lose their temporary priority if they are not registered by the end of the transition period.

The PPS Act generally applies to security interests in personal property located in Australia or if the grantor of the security interest is an Australian entity.

The PPSR does not charge a fee for registration of a Transitional Security Interest (TSI).

Examples of security agreements that may be TSIs not yet registered on the PPSR are:
• some leases and hiring agreements;
• retention of title supplies;
• commercial consignments.

Recent Australian and New Zealand Personal Property Securities Act cases have concerned security interests in personal property as diverse as plant bulbs, guitars, motor vehicles, medical equipment, construction equipment, wool and construction contract take-out rights.

You can register your security interest after 1 February 2014 but its priority over other creditors will not be preserved. This means that another person with a security interest in the same assets which is registered before yours will have first claim to the security in the event that there is default by the person who hired or purchased the goods from you or borrowed money from you to buy the goods (the grantor).

There is also the risk that if the grantor is insolvent or sells the secured assets and your security interest has not been registered, you will lose your security interest altogether.

Langes can advise you whether your commercial arrangements are transitional security interests that should be registered.

More about Personal Property Securities

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Posted 6th November 2013 by David Jacobson in Financial Services, Personal Property Securities

August 13, 2013

ITSA becomes AFSA

From 15 August 2013, the Insolvency & Trustee Service Australia (ITSA) will be known as the Australian Financial Security Authority (AFSA).

AFSA will continue to administer and regulate Australia's personal insolvency system and the Personal Property Securities Register (PPSR).

From 15 August 2013, AFSA's website will be at www.afsa.gov.au.

There is no change to the PPSR website address (www.ppsr.gov.au).

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Posted 13th August 2013 by David Jacobson in Financial Services, Personal Property Securities

March 15, 2013

Case note: retention of title in sale of goods

A recent case highlights the importance of formalising commercial contracts and strictly managing credit and delivery arrangements.

In Crossmark Asia v Retail Adventures [2013] NSWSC 55 the NSW Supreme Court granted an application by Crossmark for a declaration that it owned and is entitled to sell a consignment of 2,400 electric convection ovens and a consignment of 110,000 electric pedestal fans made by it in China for RAPL following RAPL's repudiation of the agreement.

The dispute centered on the terms of sale and whether the retention of title clause applied.

After the agreement was made (and some goods had been shipped) a dispute arose because of late payment. The seller cancelled the contract. The buyer subsequently became insolvent.

The Court decided that the contract was contained in the written agreement and not subsequent purchase orders (which the buyer had argued were a contract variation).

As the buyer had not yet obtained possession the retention of title clause was valid and the seller had the right to sell the goods, even though they carried the buyer's brand.

As the buyer had not obtained possession the relevant provisions of the Personal Property Securities Act (requiring registration of the seller's interest) did not apply.

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Posted 15th March 2013 by David Jacobson in Business Planning, Personal Property Securities

February 12, 2013

Year 2 of PPS Reform: what do businesses need to know?

Despite commencing on 30 January 2012, the implications of Personal Property Securities Reform have not been fully understood by the business community.

If you haven't reviewed your business activities for PPSR implications you should do so now.

More

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Posted 12th February 2013 by David Jacobson in Financial Services, Personal Property Securities

December 28, 2011

Closure of ASIC Company Charge, REVS and Bills of Sale Registers

As part of the transition to the PPS Register the ASIC Register of Company Charges and all State REVS and Bills of Sale, Stock, Crop and Goods Security Registers and the AMSA Ship Mortgage Register will be closed from close of business (approximately 5pm local time) on Friday 27 January 2012.

As from 1am on 30 January 2012, searches for, or lodging, security interests in personal property (which includes most forms of security other than real estate, whether granted by companies or individuals) will be conducted on the Personal Property Securities Register.

The PPS Register will be a national online service and accessible to search and register security interests 24 hours a day, seven days a week.

Failure to register a security interest on the PPS Register may result in loss of priority for the secured party if the grantor becomes insolvent or gives a competing security interest to another party.

There will be no search, lodging or amendment facilities from the close of business on Friday 27 January 2012 until the PPS Register opens on Monday 30 January. All registrations in the ASIC and State Registers to that time will be migrated to PPSR.

All REVS and encumbrance checks for transactions on the weekend of 28-29 January must be conducted by 27 January.

ASIC has announced that its final day for accepting and processing charge documents will be Friday 27 January 2012.

To ensure your lodgements are processed ASIC is encouraging parties to lodge early in the final week. If your charge documents are not registered with ASIC by the close of business on Friday 27 January 2012, you will need to register the charge with ITSA.

All current company charges will be migrated to the new PPS Register. If your charge was registered provisionally with ASIC, it will be transferred to the PPS Register. However, ASIC has advised that after this transfer, the provisional charge will need to be registered on the PPS Register within 24 months to retain the original creation date.

All historical charge information e.g. charges that have been satisfied prior to 30 January 2012, will remain on the ASIC register and will be available for searching for 7 years. Therefore, after the Australian Register of Company Charges has closed, customers may need to search both the PPS Register and the ASIC Register to get the full history of charges for a company.

More information about PPSR

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Posted 28th December 2011 by David Jacobson in Business Planning, Personal Property Securities

September 13, 2011

Personal Property Securities Register commencement update

We have been advised by the Attorney General's Department that the Personal Property Securities (PPS) Register is now expected to commence in early 2012. The Attorney General will make an announcement later this year confirming the exact commencement date for early 2012.

Under section 306(2) of the PPS Act the registration commencement time is 1 February 2012, unless the Attorney-General determines an earlier time (based on Royal Assent having been given on 14 December 2009).

Otherwise, the Act may be amended to provide a later register commencement date.

More about PPS

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Posted 13th September 2011 by admin in Personal Property Securities

June 21, 2011

ASIC prepares for PPS

ASIC has confirmed that registrations of charges against company assets currently recorded on ASIC’s Register of Company Charges will be moved to the new Personal Property Securities (PPS) Register in October 2011.

From October, company charges will no longer be required to be lodged with ASIC. Company charges will then be registered on the PPS Register and managed by the Insolvency and Trustee Service Australia (ITSA).

If your business currently registers company charges you can get more information about the impact on your securities, document changes and new procedures from our Personal Property Securities Australia site or by contacting any of our offices.

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Posted 21st June 2011 by admin in Corporations Act, Personal Property Securities

May 12, 2011

Bills update

The Personal Property Securities (Corporations and Other Amendments) Bill and the Electronic Transactions Amendment Bill 2011 have been passed by both Houses and are awaiting Royal Assent.

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Posted 12th May 2011 by admin in Business Planning, Corporations Act, Personal Property Securities, Web/Tech

September 5, 2010

Are you affected by the Personal Property Securities Act?

When the Personal Property Securities Register commences in May 2011 it will have a significant operational and legal effect on any business that provides credit to commercial or consumer customers on non-land security.

Who does it affect?
If you are a
• Lender
• ADI
• Equipment Lessor
• Manufacturer
• Wholesaler
• Distributor
• Franchisor
• Securitiser
• Retailer
• Consignor
• Buyer of accounts receivable
• Inventory financier
• Farmer
• Builder
• Insurer
• Secured party
• A trustee
• Pawnbroker
and you
• take or give fixed and floating charges
• give long term and finance leases
• take chattel mortgages
• enter retention of title arrangements
• make commercial consignments
• factor debts
• make conditional sales
• accept pledges
• provide hire purchase
• provide credit on sales
• take mortgage-backed securities
• enter repurchase agreements
• take guarantees
then your business will be affected.

Now is the time to start preparing for the changes to your credit policies and systems.

We have set up a specialist site here.

You can subscribe to our specialist Personal Property Securities RSS Feed here or to email updates here.

If you are an existing subscriber to our Langes+ combined email or feed then PPS updates will be automatically included.

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Posted 5th September 2010 by David Jacobson in Personal Property Securities

August 22, 2010

Personal property securities administration

The Personal Property Securities Register to commence in May 2011 will be an online national register for many securities which are currently registered in separate state-based registers. It will also provide for registration of some security interests which are not currently capable of being registered.

But there will also be a cost to maintaining registration. Secured parties will need to set up systems to make information available to grantors and correct the register if necessary. Obligations of secured parties include:

  • Giving a copy of the verification statement to the grantor (Section 157)
  • Dealing with amendment demands (Section 178)
  • Providing information to interested parties (section 275).

Langes can help you with preparing for the introduction of the PPS Register.

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Posted 22nd August 2010 by David Jacobson in Personal Property Securities
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