In 2009, the Personal Property Securities Act (Cth) ("PPS
Act") was established and became an important reform
introducing a national regime for secured finance using personal
property. The PPS Act replaced a complex legal system, creating one
method in respect of registration, priority and enforcement of
security interests in personal property to which it applies.
The PPS Act was intended to reduce the costs of borrowing and
increase the range of property available to secure finance,
especially for small businesses. The objectives of the Act were
Increase the consistency and certainty of secured finance in
Reduce the complexity and cost of secured finance in Australia;
Enhance the ability of businesses and consumers to use their
assets as security, and improve their ability to access
cost-effective finance in Australia.
The introduction of the PPS Act has been particularly relevant
in assisting Lawyers to easily identify security interests given or
received by their clients. Following the introduction of the PPS
Act, Lawyers have been able to:
Ensure that the terms of contracts or security agreements
adequately protect clients' positions and do not obstruct
business in the ordinary course;
Protect security interests of their clients by constantly
reviewing the register and ensuring that registration is at a
minimum and control is held where relevant;
Register security interests of their clients within 20 business
days of the interests arising;
Recommend (for larger businesses) that a PPS officer be
appointed, who is responsible for managing PPS issues arising in
daily operations of the business;
Consider whether enforcement action can be taken against
defaulting parties; and
Where it appears that a security interest is about to be
enforced against a client, consider whether the right to enforce
has actually arisen, and if not, whether urgent action should be
taken, such as an injunction to restrain enforcement.
On 4 April 2014, the Attorney-General announced a review of the
PPS Act. After more than two years of operation, the review of the
PPS Act provides an opportunity to consider, based on practical
experience, whether the PPS Act has achieved the core objectives,
as outlined above. The review will particularly focus on the
experiences of small businesses.
An interim report on issues raised by business will be prepared
by 31 July 2014 based on submissions put forward by businesses
around Australia. A final report on the review will then be
prepared by 30 January 2015.
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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