Personal Property Securities (PPS) law reform - the start
of a new chapter in taking security.
After one of the longest gestation periods for any proposed
law reform, Australia is now substantially down the track
towards having a completely new system of creation,
documentation, registration and enforcement of securities over
assets (other than real estate) of both companies and natural
On 16 May 2008, the Federal Attorney-General's
Office released the consultation draft of the proposed Personal
Property Securities Bill 2008 (Bill). Once passed into law, the
proposed legislation will change the way in which all
businesses take security over assets. There is a three month
period for consultation on the draft Bill. The current
timetable has the final Bill passing through the Commonwealth
Parliament in 2009 with the new law commencing in May 2010. Due
to Australia's federal system, complementary State
legislation is also required. The tender for development of the
electronic register is scheduled for September this year.
The Bill contains 274 sections and comprises 238 pages. A
141 page commentary on the draft Bill has also been
While PPS reform is new to Australia, there have been major
PPS reforms across the Tasman in New Zealand, as well as in a
number of Canadian provinces and the United States.
New Zealand revised its PPS laws and established an
integrated PPS online register in 2002. DLA Phillips Fox in New
Zealand actively assisted a range of clients with these reforms
through Board and senior executive briefings, training
materials, redrafting of security documentation and legal
advice on a myriad of transitional and implementation issues
arising from the 2002 New Zealand PPS reform. As a result, DLA
Phillips Fox in Australia is well placed to assist clients in
Australia with navigating their way through the new regime.
The reform will revolutionise the current complex system
under which credit providers and suppliers protect their
security interest in property other than land and create a
single online register. Currently over 70 separate laws,
administered by over 30 agencies, regulate these security
A failure to understand and stay on top of the new system
will leave many businesses with a red face when they find that
what they thought was a secured debt or charge over goods they
have supplied to a customer has lost its priority to a
competitor business or to the customer's bank following
the customer becoming insolvent.
Both private and public health services, other businesses
and suppliers in the health sector need to have PPS reform on
their radar to protect their cashflows and position as secured
creditors when their customers or suppliers fail.
Phillips Fox has changed its name to DLA Phillips Fox
because the firm entered into an exclusive alliance with DLA
Piper, one of the largest legal services organisations in the
world. We will retain our offices in every major commercial
centre in Australia and New Zealand, with no operational change
to your relationship with the firm. DLA Phillips Fox can now
take your business one step further − by connecting
you to a global network of legal experience, talent and
This publication is intended as a first point of
reference and should not be relied on as a substitute for
professional advice. Specialist legal advice should always be
sought in relation to any particular circumstances and no
liability will be accepted for any losses incurred by those
relying solely on this publication.
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In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
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