July 13, 2011

PPS Register encumbered vehicle information

The PPS Register has confirmed that a single search of the PPS Register using a Vehicle Identification Number will provide national information about whether there is any registered debt or other interest in a vehicle in any state or territory in Australia. If there is information about the vehicle on the National Exchange of Vehicle and Driver Information System - NEVDIS, search results will include written off and stolen status information in addition to make, model, colour and other information.

With respect to South Australian vehicle securities registrations, as South Australian law has not required encumbered vehicle registrations to include a VIN or chassis number it is being recommended that vehicle security interest holders ensure their South Australian registrations include the correct VIN or chassis number before data migration begins in early September 2011.

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Posted 13th July 2011 by admin in PPS register

July 8, 2011

Enforcement of PPS security interests

As well as changing the process for registering, searching and administering security interests, the Personal Property Securities Act sets out a new process for enforcement. Although the process has been designed to integrate with existing Credit Code and Corporations Act provisions, any one involved with enforcement and collections needs to review their procedures and forms from seizure of collateral through to post-sale accounting.

Depending on the security interest type and the collateral type secured parties may need to develop new enforcement procedures to comply with the Act. Security interests which do not secure the payment or performance of an obligation are not affected.

There is a new overarching duty imposed on secured parties that all rights, duties and obligations that arise under Chapter 4 must be exercised and discharged honestly and in a commercially reasonable manner.

Security interests provided for by security agreements made before the registration commencement time will not be affected.

Background

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Posted 8th July 2011 by admin in Legislation

June 23, 2011

PPS Register Commencement Date under review

The Attorney General's Department is proposing that Register Commencement Time (RCT) be delayed by three weeks to 31 October 2011.

The extra three week period will be used for non-functional tests before data migration begins on 28 August.

Register fees are expected to be confirmed in July.

Secured parties will be able to apply for credit using the credit application form to be available on the ITSA website by the end of July. All applications received at least one month before RCT will be processed before RCT, otherwise there will be a credit approval period of 14 days from the time that the completed application is received.

PPS Register

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Posted 23rd June 2011 by admin in Legislation, PPS register

June 2, 2011

Consolidated Personal Property Securities Act released

ComLaw has published an updated Personal Property Securities Act as amended, taking into account amendments made by Personal Property Securities (Corporations and Other Amendments) Act 2011. Download here.

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Posted 2nd June 2011 by admin in Legislation

June 1, 2011

Impact on the motor vehicle industry of PPS

In our PPS training we use examples from the motor vehicle industry because it offers excellent examples of the supply chain of security interests I discussed here.

The industry includes vehicle and parts manufacturers, wholesale and retail financiers, dealerships, body workshops, smash repairers, detailers and accessory retailers.The contracts between them include arrangements for the sale of vehicles and parts as well as the factoring of debts, equipment and vehicle lease finance, floor plan finance and debt factoring.

Supply of goods may be on a retention of title basis (that reserves title in the goods to the seller until the purchase price has been paid even though possession has been given to the buyer). Alternatively, cars or parts may be delivered on a consignment basis so that the retailer is only an agent or bailee.

Factors and discounters provide funds in return for an assignment of the grantor’s book debts.

Parts or materials from one supplier may be attached to or used in the manufacture of vehicles by another business. Parts will be used in modifications or repairs to vehicles.

At any one time all those parties may have competing interests in the same vehicles or parts. In addition, the PPS Act takes into account the rights of third party buyers (including the ultimate consumer) and what happens in the event of insolvency of a grantor of a security interest.

As we approach commencement of the PPS Register it is essential that each business in the supply chain understands the nature of their security interest and how that can be registered to protect their contractual rights.

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Posted 1st June 2011 by admin in Legislation, PPS register

Personal Property Securities (Corporations and Other Amendments) Bill 2011 passed

The Personal Property Securities (Corporations and Other Amendments) Act 2011 has been passed by Parliament and has received Royal Assent.

It contains the final set of amendments to the Personal Property Securities Act 2009 and consequential amendments to the Corporations Act prior to the Personal Property Securities Register commencing in October 2011.

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Posted 1st June 2011 by admin in Legislation

May 23, 2011

Will your retention of title clause be effective under the Personal Property Securities Act?

From 10 October 2011 an unpaid seller can register their interest in the goods with the Personal Property Securities Register. Unless it is registered the retention of title clause on its own may not be sufficient for a seller to claim back possession of the goods either from the buyer, a purchaser from the buyer, the buyer's other creditors or the buyer’s bankruptcy trustee, receiver or liquidator.

Most terms and conditions of sale of goods to a business currently contain a retention of title clause (also known as a “Romalpa” clause after a case of that name) by which the seller claims to retain ownership in the goods until it is paid even though possession has been given to the buyer.

This clause is included in the hope that if a buyer becomes insolvent the seller can get the goods back from the liquidator. This assumes the seller can identify the goods it sold and prove they were not paid for them. It also assumes the goods have not been attached to other goods or used in manufacturing in a way that the goods cannot be separated and returned.

Registering the interest does not necessarily mean that the seller will always be able to seize the goods from an innocent third party if the buyer becomes insolvent but the seller may be able to have priority in any claim against the proceeds of sale. And registration of the interest will support a claim on the goods if a liquidator still has possession of them.

But if a seller does not register the interest they become an unsecured creditor against the buyer if the buyer becomes insolvent. (more...)

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Posted 23rd May 2011 by admin in Legislation

April 19, 2011

Melbourne PPS seminar

We will be holding a "Getting Ready for PPS" seminar on Wednesday 4 May from 10am to 12pm at our Melbourne office.

We will discuss what you need to do now to prepare for the migration of your existing non-land securities to the Personal Property Securities Register, what current non-registrable securities will become registrable and what you need to do to register new securities after PPS commences.

We will cover the following topics:

Why PPSR?
What are the main changes?
What are the risks?
Identifying impacts on your business.
What needs to be done: documents and processes
Putting together a project plan
How will the Register work?
The transition period

To register or get more information click here.

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Posted 19th April 2011 by admin in PPS register

April 14, 2011

PPS Register fees

Transactions on the Personal Property Securities Register will be subject to the payment of fees.

The Commonwealth Attorney-General’s Department has released a Cost Recovery Impact Statement containing recommendations for the cost recovery arrangements for the Personal Property Securities Register (PPSR) as well as a response to submissions on its proposed fees.The actual fees are expected to be announced in May.

The proposed fees include:

  • Register Financing Statement for an undefined duration: $130
  • Register Financing Statement where duration is 7 years or less: $7.40
  • Register Financing Statement where duration is more than 7 years but less than 25 years: $37.00
  • Search the online register by reference to the grantor’s details, by serial number or by registration number:$3.70
  • Searches through the contact centre by phone will be charged at the same price as an online search. Searches through the contact centre by mail, email or fax, and requiring a printed search result will attract a higher fee of $29.50.

It is intended that the fees will be GST free.

Where a search is undertaken and returns multiple registrations, the searcher will be able to drill down into each registration at no additional cost.

It is intended that a user may re-access the results of a previous search, including drill down capability, during the defined " search access period‟, which is currently set at 24 hours.

The fee for a search includes the provision of a search certificate by mail or email. The fee of $29.50 is only payable where a copy of the full search results is required is required in paper or on DVD.

Discharge of a security interest will be free.

The lower fee for shorter duration registrations is intended as an incentive for secured parties to maintain their registrations.

The higher fee for registration with a not stated end time is considered to represent an effective disincentive for long dated or unstated registrations.

It is proposed that a report of registrations to expire within a defined period for a secured party group will be available for Account Holders to generate within the PPS register. The report will be included as part of account user administration functionality.

A copy of the financing statement is included in the fee for a registration. A separate fee is charged for the issue of a duplicate copy of the original statement.

There is difference between a minor amendment (costing $3.70) and an amendment (costing the same as a new registration). A minor amendment is one where the change of details does not impact on the registration end date, result in an additional grantor, or add a new type of collateral.

A change to collateral class will represents a new registration under the PPS Act, and will be considered an amendment, not a minor amendment.

The first fee review will take place within 12 months of the commencement of operations.

A fee will not apply when registering a transitional security interest on the Register.

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Posted 14th April 2011 by admin in PPS register

March 21, 2011

Registering your security interest under PPS

There will be 2 methods of registering financing statements on the PPS register: manually on the website or by the B2G (business to government) channel.

Using the website based register secured parties will be able to register interests one at a time in real time.

If a secured party has a need for high volume registrations they can build a B2G channel to process their registrations: they can batch them at their end and then their system will send them over one by one as the register is updated in real time.

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Posted 21st March 2011 by admin in PPS register
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