Personal Property Securities Act

The Personal Property Securities Act (PPS Act) commences on the 1^st February 2012.  The legislation applies to transactions involving personal property, some of which are not currently “security transactions” but which, under the PPS Act, are deemed to be subject to the legislation including

•  the supply of goods under a Retention of Title Clause eg. Romalpa Clause (a Retention of Title Clause which is a provision in a contract for the sale of goods, that the title to the goods remains vested in the seller until certain obligations (usually payment of the purchase price) are fulfilled by the buyer.  No matter how sophisticated the Retention of Title Clause is, security would be void if the assets are not recorded in the Register of Personal Properties Securities.

• the delivery of goods to a consignee under a commercial consignment (a business supplying goods such as computing equipment, books, jewellery, watches etc., on consignment to retailers) will need to register their interests in assets held by the retailer.

• a Payment Retention Clause under a construction contract.

• agent’s right, under an Agency Agreement to retain property until the agent has been paid their fees and expenses.

• a security deposit under a Supply Agreement.

The legislation requires businesses to register their security interest in customer assets in a National Personal Property Register.  Registration is critical to ensure that businesses have valid and enforceable claims over assets in the event that their customer became insolvent or enters into administration.

If you would like us to review your situation relative to this new legislation, please don’t hesitate to contact us.