It's all in the timing - Registering on the PPS register

This article was published in the Hire and Rental Industry Magazine August 2025, page 24

A timely registration on the Personal Property Securities Register (PPSR) can make the difference between protecting your rights as secured creditor or losing priority to, or your goods altogether.

Important timeframes to be aware of

Section 267 of the Personal Property Securities Act 2009 (Cth) (PPSA)

Under section 267 if you have a security interest, for example, in equipment that you have hired to a grantor, and that grantor enters into 'insolvency', and you have not registered on the PPSR or otherwise perfected your security interest, your equipment will 'vest' or become part of the grantor's property. The insolvency referred to in this section is, for a corporate grantor, winding up, administration, execution of a deed of company arrangement, appointment of a restructuring practitioner, or the making of a restructuring plan (Corporate Insolvency Event), and in relation to an individual, bankruptcy.

There are a few exceptions to this rule in section 268 of the PPSA. They include if the security interest does not secure payment or performance of an obligation and arises from a transfer of an account or chattel paper or a commercial consignment. A PPS Lease is not covered as an exception.

Registration made, but not in time

If your customer grants you a security interest and is a company, section 588FL of the Corporations Act 2001 (Cth) requires you to register on the PPSR by the latest of the following times:

1. within 20 business days from the date the security agreement came into force (or the time that is the Critical Time - whichever is the earlier); or
2. 6 months before the date that is the Critical Time.

Each Corporate Insolvency event will have a specific 'Critical Time', being the date when the event is deemed to have commenced. If your security interest is not registered by the timing set out in section 588FL, this section will deem the security interest unenforceable unless you seek an order of the Supreme or Federal Court of Australia under section 588FM of the Corporations Act.

Power of the Court to fix a later time

The Court has power under section 588FM of the Corporations Act to prevent the security interest from vesting in the grantor by extending the date of registration and fixing a later registration time. However, to make such an order the Court will need to be satisfied that:

1. the failure to register in time was accidental or inadvertent;
2. the delay in registering will not prejudice the position of creditors or shareholders; or
3. on other grounds that demonstrate it is just and equitable to make the order.

These applications are costly and require you to act promptly.

Any exceptions to section 588FL of the Corporations Act?

There are a few exceptions which relate to security interests that do not secure payment or performance of an obligation and are a:

1. transfer of an account or chattel paper;
2. commercial consignment;
3. PPS Lease, if paragraph (e) (serial numbered goods) of the definition of a PPS Lease applies to the lease and none of the other paragraphs apply.

The issue with (c) above is that currently there is no paragraph (e) to the PPS Lease section of the PPSA. It is arguable that this may just apply to goods or equipment that are deemed to be serial numbered goods under a PPS Lease and meet the duration requirements, however this is not guaranteed.

Key takeaways

Navigating the timing can be tricky. We offer our top 3 tips:

1. Promptly register on the PSR
2. Regularly review your customer's solvency position
3. Seek an extension from the Court promptly if you do not fit into an exception

Our expertise

• Personal Property Securities
• Corporate Governance

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.