Holders of security interests over personal properties should
record their interest on the Personal Property Securities Register
(PPS Register) before 1 February 2014 to ensure
that their security interests are enforceable and that they do not
lose priority to competing interest holders.
The PPS Register is a register of security interests over
various types of personal property. The PPS Register replaced
numerous existing Federal and State registers on 30 January 2012.
Security interests must be "perfected" to be enforceable
and to obtain priority against competing interests. For example, a
creditor with an unperfected security interest loses priority to a
creditor with a perfected security interest and becomes an
unsecured creditor on insolvency of the debtor, even if the
unperfected security interest existed before the perfected
interest. Security interests are perfected by registration on the
Usual security types such as mortgages and charges are
considered "security interests" for the purposes of the
PPS Register. Other arrangements which are not traditionally
thought of as security interests but which must be registered on
the PPS Register include:
retention of title provisions – where the seller sells
goods but retains title pending payment; and
consignments – where the owner places goods for sale with
a third party but retains title.
In both cases, the owner of the goods (and holder of the
corresponding security interest) will lose title to another
registered security holder or liquidator if the interest is not
Many security interests registered on the existing Federal and
State registers are not automatically transferred to the PPS
Register. As a result, security interests registered on existing
registers, including those on the Registers of Patents, Designs and
Trade Marks, will be of no further effect from a security
perspective from 1 February 2014. This means that holders of
relevant security interests must record their interests on the PPS
Register before 1 February 2014 to preserve their security and
priority rights. In any case, security holders should register
their interests as soon as possible to obtain priority. Note that
intellectual property licences are not security interests and do
not need to be registered on the PPS Register.
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.
Shelston IP has been awarded the MIP Global Award for
Australian IP Firm of the Year 2013.
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