The PPSA, or its Registration Commencement Time (RCT), was
expected to kick off on 31 October 2011 and we all waited with
bated breath for this to occur...
31 October 2011 has come and gone, so where are we now?
It has become clear that getting the PPS Register functional in
time, meant that a commencement date of 31 October 2011 was no
longer feasible. Section 306 of the PPSA provides that the RCT is
the "start of the first day of the month that is 26 months
after the month in which this Act is given the Royal Assent or an
earlier time determined by the Minister."
The PPSA was given Royal Assent on 10 December 2009, so
technically the latest RCT under the PPSA is 1 February 2012 (the
"Deadline"). While no updated RCT has been formally
announced as yet, 30 January 2012 is the date that
the Attorney General's department is working towards and
which is referred to on its website.
The Personal Property Securities Amendment (Registration
Commencement) Bill 2011 is currently before Parliament. If passed,
it will allow the PPSA to be amended granting an option to extend
the RCT Deadline in the PPSA as it now stands.
However, we are still waiting with bated breath.
A little leeway is a good thing....
We are working on the assumption that the RCT is 30 January
2012. To that end we strongly recommend that if your business
dealings fall within the ambit of the PPSA, you use the delay to
have your trading terms, systems and procedures reviewed and
updated to make sure you are PPSA ready.
Another day, another Amendment
The Personal Property Securities Amendment Regulations 2011
(No.1) were made on 29 September 2011. These resulted in certain
amendments to the PPS Regulations 2010 and you need to be aware of
Some of the key changes are:
1. Narrowing the definition of a PPS Lease:
A lease or bailment will not be a PPS lease if it is part of a
pooling arrangement. A pooling arrangement refers to an
where goods are hired, bailed or leased out from time to time
to one or more parties and these goods are pooled for collective
the hire, lease or bailment does not secure payment or
performance of an obligation; and
possession of the goods can be passed between a number of users
of the goods without prior approval of the owner and regardless of
whether it is subject to conditions; and
the goods are fungible (i.e. can be exchanged for another good
of the same kind)
The most common example of this type of personal property and
arrangement would be pallets which are used to store or transport
goods and at times end up in the hands of third parties who are not
a party to a lease agreement.
2. The definition of a motor vehicle has been
It already includes personal property that is capable, when
being towed or attached to a motor vehicle, of travelling at a
speed of greater than 10km/h and has a VIN, chassis or
manufacturer's number. Now it includes as part of these
that it is a piece of machinery or equipment that is equipped
with wheels and designed to be attached to, or towed by, a motor
vehicle (previously it was stated as being without motive
power and designed for attachment to and towing behind a motor
3. A further interest to which the PPSA does not apply has been
introduced. It does not apply to an interest in an authority,
lease, licence or permit that is created under the Offshore
Minerals Act 1994 or the Offshore Petroleum and Greenhouse Gas
Storage Act 2006.
4. The taking free of a security interest in motor vehicles has
been clarified where it is subject to a transitional security
interest. Previously under section 45(1) of the PPSA, if a motor
vehicle was required to be described by serial number, and a search
carried out between the previous day and the date of sale or lease
to another did not show the registration, then subject to some
exceptions, a third party could acquire the motor vehicle free of
the security interest. The amendment now excludes from this, a
motor vehicle subject to a transitional security interest that was
not able to be registered by serial number on a State or Territory
register that registered security interests in motor vehicles.
There have been a few other amendments to clarify the
identifiers used when registering a financing statement and the
Regulations are aimed at clarifying any areas of uncertainty.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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