Businesses and individuals must identify and register their
security interests on the PPS Register to avoid losing assets to
customers' secured creditors.
The case of Re Maiden Civil (P&E) Pty Ltd 
NSWSC 852 (27 June 2013) highlights some important points:
Businesses and individuals should seek advice on the
transitional rules in the Personal Property Securities Act
For example, if you had an interest that could have been
registered on either the Motor Vehicles and Boats Securities
Act 1986 (Qld) or the Bills of Sale and other Instruments
Act 1955 (Qld) and you did not register before 30 January
2012, you might be unable to rely on the transitional provisions
and risk losing your assets to a secured creditor.
It is essential to have a written agreement and all relevant
documentation to support your security interests.
In the case, Queensland Excavation Services (QES) leased three
excavators to Maiden Civil (Maiden). The parties did not have a
written lease agreement.
Maiden defaulted under the terms of one of its loans and the
financier appointed receivers. The receivers claimed that the
financier was entitled to the three excavators before QES, even
though QES owned the excavators.
The Court held that, without a written agreement, QES could not
enforce its alleged security interest against a third party. Also,
the Court confirmed that as the excavators could have been
registered on transitional registers (such as the Northern
Territory Register of Interests in Motor Vehicles and Other Goods
Register, analogous to the QLD REVS and QLD Bill of Sale Register),
the transitional provisions did not apply. The excavators were
therefore available to be repossessed.
QES might have prevented this outcome if it had identified and
perfected its security interests in accordance with the rules in
If you are relying on the transitional protection rules under
the PPSA, think twice because:
the rules do not apply if you could have registered your
interest on a transitional register before 30 January 2012;
you cannot enforce a security interest against a third party
(such as a creditor) without a written agreement; and
the transitional protections end on 30 January 2014.
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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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