On 19 March 2009, the Senate Legal & Constitutional Affairs
Committee ("the Committee") tabled its report in the
Senate on the Exposure Draft of the Personal Property Securities
Bill 2008 ("PPS Bill").
The Committee recommended, among other things, that the Federal
Attorney General's Department ("Department") delay
the commencement of the scheme by at least 12 months to May
Over the course of last year, we updated you on the progress of
the draft PPS Bill, which was released on 16 May 2008 by the
Federal Attorney-General. The PPS Bill is proposed to replace over
70 pieces of Commonwealth, State and Territory law and includes
provisions relating to:
the creation of valid security interests in personal property
and priority of competing security interests in personal
when a person acquires personal property free of a security
enforcing security agreements upon default by the debtor.
A national "PPS Register" is also proposed so that
security interests can be searched on a centralised online
The Council of Australian Governments ("CoAG")
previously agreed to implement the PPS Bill by May 2010. On 2
October 2008, the CoAG Ministers signed an Inter-Governmental
Agreement on PPS Reform, the effect of which is that the State
governments have agreed to refer power to the Commonwealth to
facilitate the operation of the PPS Bill.
In our last e-alert dated 3 December 2008, we informed you that
the Exposure Draft of the PPS Bill had been referred to the
Committee on for inquiry and report.
Last night, the Committee tabled its report in the Senate
("Report"). The Committee made 11 recommendations to the
Department in the Report, including:
simplification of the language, structure and terms used in the
PPS Bill and greater use of "overseas provisions" to
allow overseas experience to provide guidance for the Australian
the commencement date for the scheme be extended by at least 12
months to May 2011 to allow the Committee's recommendations to
be implemented and for advice from stakeholders to be taken into
account before the PPS Bill is finalised;
inclusion of a requirement that the operation of the PPS Bill
be reviewed in three years;
inclusion of key privacy protections for individuals, including
a prohibition on making the address of any individual public and
that a Privacy Impact Assessment be undertaken by an independent
a detailed explanation in the explanatory memorandum on the
requirements for rights and duties to be exercised honestly and in
a commercially reasonable matter;
the duty to act in a commercially reasonable matter should not
interfere with parties with similar bargaining power agreeing about
what constitutes commercially reasonable behaviour;
inclusion of conflict of law provisions;
review of the scope and content of the enforcement provisions
of the PPS Bill by the Department; and
consideration be given to improving the priority of an
unperfected lessor as against unsecured or other unperfected
interests of the goods.
It remains to be seen what action the Department will take in
relation to Committee's recommendations. We will continue to
keep you updated on any further developments.
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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