Australia: Civil Aviation – Farewell Personal Property Securities Act - Welcome Cape Town Convention

The Hub

6 key points

  • Cape Town Convention offers 3 main advantages:
    • financiers will have more confidence in enforcing transactions;
    • airlines will be entitled to fee discounts and cost reductions; and
    • it will lead to harmonisation of Australia's aviation securities laws with those that apply internationally.
  • Personal Property Securities Act 2009 (PPSA) will be replaced by the Cape Town Convention for large aircraft.
  • PPSA will still apply to smaller aircraft.
  • No significant restructuring of the PPSA will be required.
  • Minimal amendment is required to other relevant legislation that will enable the Government to ratify the Cape Town Convention.
  • Accession is consistent with the Council of Australian Governments' National Reform Agenda to harmonise laws between Australia and New Zealand.

What should aviation financiers and aviation related businesses do now?

Aviation financiers and aviation related businesses should start to review their current agreements to ensure they are compliant and refer to the correct legislative framework.

Norton Rose Fulbright will also be providing educational seminars and workshops to interested parties to acquaint them with the challenging legal environment as a result of the proposed changes to the aviation industry's securities laws.

Australian Government agrees to accede to Cape Town Convention

On 12 October 2012 the Minister for Infrastructure and Transport, Mr Albanese, announced that the Australian Government will accede to the Cape Town Convention1. Details on the Australian Government's decision to accede can be found at Legal Flyer (December 2010) and Australian government announces it will accede to the Cape Town Convention – major development in aviation finance for Australia.

Shortly after publishing its media release, the office of the Minister tabled the Cape Town Convention2 at the Joint Standing Committee on Treaties. Once the treaty examination process has been completed, it will report to Parliament on the implementing legislation. It is expected that the Joint Standing Committee's report will be tabled in Parliament on or by 19 June 2013.

Will the Cape Town Convention cover the field?

The Cape Town Convention is envisaged to complement the PPSA, not replace it entirely. The PPSA will only apply in accordance with the terms of the Cape Town Convention as it relates to aircraft objects that fall out the definitions of 'aircraft' and 'airframe' under the Cape Town Convention.

While this may leave financiers, owners and lessors with the obligation to comply with both the PPSA and the Cape Town Convention, most commercial aircraft will fall out operation of the PPSA.

How will accession impact on the Personal Property Securities Act and other legislation?

No significant restructuring of the PPSA will be required. The Personal Property Securities Regulations 2010 were drafted to include provisions that recognise the role of the Cape Town Convention as they relate to aircraft and their inclusion has given the government the opportunity to accede without the need to undertake a fundamental overhaul of the PPSA. The only significant amendment will be to insert a provision that makes it clear that the Cape Town Convention prevails over the PPSA to the extent of any inconsistency with the PPSA. This same provision is likely to be required to be added to the Civil Aviation Act 1988 which will require amendments to allow for the recording of IDERAs and to direct CASA to de-register an aircraft from the aircraft register in prescribed circumstances. The Civil Aviation Safety Regulations 1988 will also require amendment to reflect the requirements of the Aircraft Protocol, in particular Article XIII (recording of IDERAs) and Article XI (insolvency remedies).

Minimal amendment will be required to other legislation such as the Corporations Act 2001 to allow for implementation of the Cape Town Convention.

Harmonising laws between Australia and New Zealand

It has been one of the objectives of the Council of Australian Governments to harmonise the laws between Australia and New Zealand through its National Reform Agenda. New Zealand introduced implementing legislation to enable its government to accede to the Cape Town Convention on 31 May 20104. The bill received royal assent on 30 June 2010 and the 12 declarations made by the New Zealand government came into effect on 1 August 2010.

Once Australia passes its own implementing legislation it will be closer to satisfying this objective.

Next steps

There are several steps to be completed before accession can take place; the treaty examination process must be completed, implementing legislation needs to be drafted and the relevant bills passed by both houses of parliament. Once that has happened it is likely that the commencement of the bill to implement the Cape Town Convention will come into force on royal assent with the declarations coming into force at a later date, the usual period being within 3 months of royal assent.

Final thoughts

The decision to register an international interest under the Cape Town Convention will be optional;5 however failure to register that interest on the International Registry6 can be fatal to the interests of a financier, owner, lessor and lessee. This is primarily driven by the priority rules contained in the Cape Town Convention that provide simply that the first party to have a registered and "searchable" interest has priority.

Like the PPSA, if a secured party has a registrable interest in an aircraft object that is covered by the Cape Town Convention, the interest must be perfected in the manner required under the Cape Town Convention. Failure to do so may result in the extinguishment of the interest or at a minimum, loss of priority to competing creditors or a subsequent purchaser, even where that party has actual knowledge of the interest.

In light of the significant changes to the substantive and procedural laws relating to perfection of an interest in aircraft objects that have occurred because of the introduction of the PPSA and in the near future, the Cape Town Convention, Norton Rose FulbrightNorton Rose Fulbright will be providing an educational program on best practices when dealing with the Cape Town Convention and the conducting of aircraft closings.


1On 16 November 2001 at the conclusion of a diplomatic conference held in Cape Town, 53 countries agreed to the adoption of the Convention on International Interest in Mobile Equipment created for high-value moveable equipment. The Convention is supplemented by 3 protocols, aircraft equipment, rail rolling stock and space assets but the Convention has no effect in relation to those protocols until its protocol comes into effect. In relation to the Protocol on aircraft equipment, known as the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (together called the Cape Town Convention) it came into effect at the same time as the Convention but at the time of writing the other 2 have not yet come into force.

Australia participated in the development of the Cape Town Convention but did not sign it. The Cape Town Convention came into force on 1 March 2006. Since adoption, more than 45 countries and the European Union (as one Regional Economic International Organisation) have ratified the Cape Town Convention, including New Zealand, United States of America and Canada. For Australia, in the case of aircraft objects, the Cape Town Convention will only come into force when the Protocol enters into force in Australia.

2On 1 November 2012 it tabled a summary of its analysis entitled National Interest Analysis [2012] ATNIA 24 with attachment on consultation and Regulation Impact Statement. The committee has been appointed to inquire into and report on matters arising from treaties and related National Interest Analyses.

3See also the definition of 'helicopter' under the PPSA as the Cape Town Convention does not apply to certain types of helicopters.

4The implementing legislation was entitled Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill 2010.

5Equally under the PPSA registration is optional but failure to do so can also be fatal.

6International Registry of Mobile Assets

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.