27 December 2013 | Reading time: < 1 minute
Who is affected?
The initial warning noises about compliance with the Personal Property Securities Act 2009 Cth (PPSA) are becoming a chorus. The following should serve as another warning to all owners and financiers who lease or hire goods to others and to all those who sell goods on a retention of title basis.
You must properly register your interest on the Personal Property Securities Register (PPSR) if you are to avoid the risk of losing the goods in circumstances where the lessee is faced with liquidation or receivership (or indeed where a competing creditor claims an interest in the goods).
Don’t gamble in this high stakes game.
Unless you perfect the registration of your security interest on the PPSR, you run the risk of a subsequent registered security interest holder taking priority over your legitimate (yet unregistered) interest.
I’ll see your title, and raise you a registered security interest!
The recent decision in the Supreme Court of NSW (Maiden Civil (P&E) Pty Ltd v Queensland Excavation Services Pty Ltd & Ors), resulted in the owner of machinery not being able to reclaim the assets because they had failed to perfect the registration of their interest on the PPSR. When the receivers were called in by a third party, the receiver claimed that the goods formed part of the divisible assets of the company notwithstanding that the company did not own the goods. They proceeded to sell the goods to pay out the creditor and kept the balance for their own fees. The owner was powerless to stop this process.
It’s time to get this highly important (and yes, tedious) outstanding task off your to-do list!