Continuing on from our series of alerts on the Personal Property Securities Act 2009 (Cth) (PPSA), we advise that the transitional period under the PPSA is due to expire on 31 January 2014.
The purpose of the transitional period was to provide temporary protection for security interests that were created prior to the register coming into force, being 30 January 2012. Whilst most security interests would have migrated from other existing registers, such as charges from ASIC, not all security arrangements had a register prior to the PPSA and therefore the transitional period allowed for those pre-existing security interests to be formally recognised by allowing secured parties to register those interests on the Personal Property Securities Register.
The types of arrangements that the transitional period was designed to protect were retention of title arrangements, consignment arrangements and equipment and chattel mortgages; as there was no formal body to register these arrangements with prior to the PPSA. Failure to adequately protect these interests that existed prior to 30 January 2012, may result in the possibility of another party securing priority over your security interest or if the grantor becomes insolvent, being treated as an unsecured creditor. The old methods of enforceability under the those arrangements that existed prior to the PPSA may no longer be enforceable due to other secured parties having registered security interests over the same assets.
To ensure that you are not holding an unperfected security interest that existed prior to 30 January 2012, you will need to review all your current contractual arrangements to ensure that your security interest is registered and protected prior to the expiry of the transitional period.
At Atkinson Vinden we understand the importance of ensuring that your security interests are properly protected on the Personal Property Securities Register. If you are unsure as to whether you have adequate protection for your interests or require any clarification, please contact Sheena Vinden to discuss further.