Source: https://www.legislation.gov.au/Details/C2010A00096
Timestamp: 2019-05-24 21:28:14
Document Index: 618027238

Matched Legal Cases: ['art 1', 'art 2', 'art 3', 'art 4', 'art 5', 'art 6', 'art 7', 'art 8', 'art 9', 'art 10', 'art 1', 'art 2', 'art 1', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 1', 'art 2', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 3', 'art 5', 'art 5', 'art 4', 'art 5', 'art 1', 'art 6', 'art 1', 'art 7', 'art 5', 'art 8', 'art 5', 'art 5', 'art 5', 'art 5', 'art 9', 'art 5', 'art 2', 'art 5', 'art 5', 'art 5', 'art 5', 'art 10', 'art 10', 'art 10', 'art 1', 'art 2', 'art 2', 'art 5', 'art 5', 'art 5', 'art 2', 'art 2', 'art 9', 'art 2', 'art 2', 'art 4', 'art 4', 'art 4', 'art 7', 'art 5', 'art 5', 'art 9', 'art 9', 'art 9', 'art 9', 'art 9', 'art 2']

Details: C2010A00096
- C2010A00096
Act No. 96 of 2010 as made
An Act to amend certain Acts as a consequence of the enactment of the Personal Property Securities Act 2009, to amend that Act, and for related purposes
Originating Bill: Personal Property Securities (Corporations and Other Amendments) Bill 2010
Registered 07 Jul 2010
Date of Assent 06 Jul 2010
C2010A00096
No. 96, 2010
Schedule 1—Corporations Act 2001 5
Part 1—New concepts 5
Part 2—Repeal of Chapter 2K (registration of charges) 11
Part 3—Charges and chargees 13
Division 1—Specific amendments 13
Division 2—Bulk amendments 19
Part 4—Floating charges 22
Part 5—Security 27
Part 6—Mortgages and mortgagees 29
Part 7—Liens and pledges 30
Part 8—PPSA retention of title property 32
Part 9—Special requirements for security interests 43
Part 10—Transitional provisions 53
Schedule 2—Personal Property Securities Act 2009 58
Part 1—Specific amendments 58
Part 2—Bulk amendments 99
Schedule 3—Amendment of other Acts 101
Designs Act 2003 101
Fisheries Management Act 1991 101
Mutual Assistance in Criminal Matters Act 1987 102
Navigation Act 1912 102
Offshore Petroleum and Greenhouse Gas Storage Act 2006 103
Personal Property Securities (Consequential Amendments) Act 2009 105
Proceeds of Crime Act 2002 105
Torres Strait Fisheries Act 1984 108
[Assented to 6 July 2010]
This Act may be cited as the Personal Property Securities (Corporations and Other Amendments) Act 2010.
2. Schedule 1, items 1 to 185
The registration commencement time within the meaning of section 306 of the Personal Property Securities Act 2009.
(see F2011L02397)
3. Schedule 1, item 186
4. Schedule 1, item 187
5. Schedule 2, items 1 to 107
6. Schedule 2, item 108
7. Schedule 2, items 109 to 153
Immediately after the commencement of item 1 of Schedule 1 to the Personal Property Securities (Consequential Amendments) Act 2009.
10. Schedule 3, items 3 and 4
12. Schedule 3, items 6 to 15
13. Schedule 3, item 16
Immediately after the commencement of item 14 of Schedule 2 to the Personal Property Securities (Consequential Amendments) Act 2009.
14. Schedule 3, item 17
Immediately after the commencement of item 17 of Schedule 1 to the Personal Property Securities (Consequential Amendments) Act 2009.
15. Schedule 3, items 18 to 21
16. Schedule 3, items 22 and 23
However, if the Crimes Legislation Amendment (Serious and Organised Crime) Act 2010 receives the Royal Assent before the registration commencement time within the meaning of section 306 of the Personal Property Securities Act 2009, the provision(s) do not commence at all.
17. Schedule 3, items 24 to 28
18. Schedule 3, item 29
Immediately after the commencement of item 19 of Schedule 1 to the Personal Property Securities (Consequential Amendments) Act 2009.
19. Schedule 3, item 30
Immediately after the commencement of item 18 of Schedule 2 to the Personal Property Securities (Consequential Amendments) Act 2009.
Note 1: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.
Note 2: The registration commencement time, within the meaning of section 306 of the Personal Property Securities Act 2009, is the start of 1 February 2012 (the first day of the month that is 26 months after that Act was given the Royal Assent), or an earlier time determined by the Minister administering that Act, by legislative instrument.
Part 1—New concepts
5 Section 9 (at the end of the definition of property)
(a) in Part 5.3A (administration)—has a meaning affected by section 435B; and
(b) in Part 5.4B (winding up in insolvency or by the Court)—has a meaning affected by section 465; and
(c) in Part 5.5 (voluntary winding up)—has a meaning affected by section 489F; and
(d) in Part 5.6 (winding up generally)—has a meaning affected by section 513AA; and
(e) in Part 5.7B (recovering property or compensation for creditors of insolvent company)—has a meaning affected by section 588C; and
(f) in Part 5.8 (offences relating to external administration)—has a meaning affected by subsection 589(5); and
(g) in Part 5A.1 (deregistration, and transfer of registration, of companies)—has a meaning affected by section 601; and
(h) in Part 5B.2 (registrable bodies)—has a meaning affected by section 601C.
6 Section 9 (definition of retention of title clause)
10 After Division 6 of Part 1.2
Division 6A—Security interests
51 Meaning of PPSA security interest
51A Meaning of security interest
(a) a PPSA security interest; or
(b) a charge, lien or pledge.
51B Meaning of secured party
secured party, in relation to a security interest, means:
(a) if the security interest is a PPSA security interest—a secured party within the meaning of the Personal Property Securities Act 2009; or
(b) if the security interest is not a PPSA security interest, but consists of a charge, lien or pledge in relation to the property—a chargee, lienee or pledgee in relation to the charge, lien or pledge.
Note: Security interests are either PPSA security interests, or charges, liens or pledges (see section 51A).
51C Meaning of circulating security interest
circulating security interest means a security interest that is:
(a) a PPSA security interest, if:
(i) the security interest has attached to a circulating asset within the meaning of the Personal Property Securities Act 2009; and
(ii) the grantor (within the meaning of that Act) has title to the asset; or
(b) a floating charge.
51D Meaning of possessory security interest
possessory security interest, in relation to property, means a security interest that is:
(a) a PPSA security interest in the property that is perfected by possession or control, within the meaning of the Personal Property Securities Act 2009; or
(b) a lien or a pledge in relation to the property.
51E Meaning of secured creditor
secured creditor of a corporation means a creditor of the corporation, if the debt owing to the creditor is secured by a security interest.
51F Meaning of PPSA retention of title property
(1) Property is PPSA retention of title property (short for Personal Property Securities Act retention of title property) of a corporation if:
(2) A reference in this Act to the property of a corporation does not include a reference to any PPSA retention of title property of the corporation, unless provided otherwise expressly or by necessary implication.
Part 2—Repeal of Chapter 2K (registration of charges)
11 Section 9 (paragraphs (a) and (b) of the definition of company)
12 Paragraph 3.9 of the small business guide in Part 1.5
Omit “and a register of charges”.
13 Paragraph 3.9 of the small business guide in Part 1.5
Omit “—1302”, substitute “, 1301”.
14 Paragraph 3.11 of the small business guide in Part 1.5
15 Paragraph 4.4 of the small business guide in Part 1.5 (table item 2)
Omit “, 1302”.
16 Paragraph 4.4 of the small business guide in Part 1.5 (table item 6)
17 Subsection 168(1) (note 1)
18 Chapter 2K
19 Paragraph 283DA(d)
20 Section 553E
Omit “and to section 279”.
21 Paragraph 601BC(6)(c)
22 Subsection 601BC(6) (note)
23 Paragraphs 601BK(1)(a) and (b)
(a) set up the register required by section 168; and
(b) include in the register the information that is required to be included in the register and that is available to the company on registration; and
24 Subsection 601BM(2)
Omit “and sections 263, 266 and 276 set out”, substitute “sets out”.
25 Paragraphs 601CB(d) and 601CE(e)
26 Section 1302
27 Section 1446
Part 3—Charges and chargees
Division 1—Specific amendments
28 Subparagraph 283BF(4)(c)(ii)
Omit “security or charge”, substitute “security interest”.
29 Subsection 420B(1)
(1) On the application of a managing controller of property of a corporation, the Court may by order authorise the controller to sell, or to dispose of in some other specified way, specified property of the corporation, even though it is subject to a security interest (the prior security interest) that has priority over a security interest (the controller’s security interest) in that property that the controller is enforcing.
Note: The heading to section 420B is altered by omitting “charge” and substituting “security interest”.
30 Paragraphs 420B(2)(b) and (d)
Omit “holder of the prior charge”, substitute “secured party in relation to the prior security interest”.
31 Subsection 420B(3)
32 Paragraph 434B(3)(b)
Omit “holder of the charge”, substitute “secured party in relation to the security interest”.
33 Subsection 434B(5)
Omit “holder of the charge”, substitute “secured party”.
34 Subsection 436C(1)
(1) A person who is entitled to enforce a security interest in the whole, or substantially the whole, of a company’s property may by writing appoint an administrator of the company if the security interest has become, and is still, enforceable.
(1A) Subsection (1) applies in relation to a PPSA security interest only if the security interest is perfected within the meaning of the Personal Property Securities Act 2009.
Note: The heading to section 436C is altered by omitting “Chargee” and substituting “Secured party”.
35 Division 7 of Part 5.3A (heading)
Division 7—Rights of secured party, owner or lessor
441 Application of Division
Except as expressly provided, nothing in this Division limits the generality of anything else in it.
36 Section 441A
Subdivision B—Property subject to security interests
441AA Application of Subdivision—PPSA security interests
This Subdivision only applies in relation to the enforcement of a PPSA security interest if the security interest is perfected, within the meaning of the Personal Property Securities Act 2009, at the time the enforcement starts.
441A Secured party acts before or during decision period
(c) the property of the company (the secured property) subject to the respective security interests together constitutes the whole, or substantially the whole, of the company’s property; and
(iii) in so far as the security interests were enforced in relation to property of the company by a receiver or controller appointed for the purposes of Part 5.2 (whether under an instrument relating to the security interest or a court order)—whether or not the same person was appointed in respect of all of the last‑mentioned property.
(3) Nothing in section 437C, 440B, 440F or 440G, or in an order under subsection 444F(2), prevents any of the following from enforcing the security interest, or any of the security interests:
37 Section 441C
441C Security interest in perishable property
(1) This section applies if perishable property of a company under administration is subject to a security interest.
(2) Nothing in section 437C or 440B prevents any of the following from enforcing the security interest, so far as it is a security interest in perishable property:
(3) Section 437D does not apply in relation to a transaction or dealing that affects perishable property of the company and is entered into by:
38 Subsection 441D(3)
Omit “chargee’s”, substitute “secured party’s”.
Note: The heading to section 441D is altered by omitting “chargee etc. in relation to charged” and substituting “secured party etc. in relation to secured”.
39 Section 441E
Omit “a charge”, substitute “an agreement or instrument under which a security interest is created or arises”.
Note: The heading to section 441E is altered by omitting “charge” and substituting “security agreement etc.”.
40 After section 441E
441EA Sale of property subject to a possessory security interest
(2) The secured party is entitled to retain proceeds of the sale as follows:
(a) if the net proceeds of sale equals the debt secured by the possessory security interest—the secured party is entitled to retain the net proceeds;
(b) if the net proceeds of sale exceeds the debt secured by the possessory security interest—the secured party is entitled to retain so much of the net proceeds as equals the amount of the debt secured by the security interest, but must pay the excess to the administrator on behalf of the company;
(c) if the net proceeds of sale fall short of the debt secured by the possessory security interest—the secured party is entitled to retain the net proceeds.
Subdivision C—Property not subject to security interests
441EB Scope of Subdivision
This Subdivision does not apply in relation to the enforcement of a right, or the performance or exercise of a function or power, if the enforcement, performance or exercise is authorised by (or because of) a transaction or dealing that gives rise to a security interest in the property concerned.
Example: An example of a transaction or dealing in relation to which this Subdivision does not apply because of this section is a commercial consignment of personal property. Such a transaction gives rise to a PPSA security interest because of section 12 of the Personal Property Securities Act 2009. The consigned property is PPSA retention of title property of the company (see sections 51F and 435B).
Note: Subdivision B (property subject to security interests) may apply in relation to transactions or dealings to which this Subdivision does not apply because of this section. For example, Subdivision B would apply in relation to a commercial consignment of personal property, because such a transaction gives rise to a PPSA security interest.
41 Sections 441JA and 441K
42 Paragraphs 442D(1)(a) and (b) and (2)(a) and (b)
Note: The heading to section 442D is altered by omitting “chargee, receiver etc.” and substituting “secured party, receiver or controller”.
43 Subsection 442D(3)
Omit “chargee, receiver or other person”, substitute “secured party, receiver or controller”.
44 Paragraphs 443B(7)(b) and (c)
(b) under an agreement or instrument under which a security interest in the property is created or arises:
(i) the secured party appoints an agent to enter into possession, or to assume control, of the property; or
(ii) the secured party takes possession, or assumes control, of the property;
45 Subsection 477(2B)
Omit “charge”, substitute “an agreement under which a security interest arises or is created”.
46 Paragraph 601AE(3)(a)
Omit “charge”, substitute “security interest in”.
47 Paragraph 652C(1)(g)
Omit “charges, or agrees to charge,”, substitute “grants, or agrees to grant, a security interest in”.
48 Paragraph 1020B(3)(b)
Omit “charged or pledged”, substitute “subject to a security interest”.
Division 2—Bulk amendments
49 Amendments to change references to charges etc. to references to security interests etc.
The specified provisions of the Corporations Act 2001 listed in items 50 to 85 of this Schedule are amended by:
(a) omitting “charge on” (wherever occurring) and substituting “security interest in”; and
(b) omitting “charge” (wherever occurring otherwise than as mentioned in paragraph (a)) and substituting “security interest”; and
(c) omitting “charges on” (wherever occurring) and substituting “security interests in”; and
(d) omitting “charges” (wherever occurring otherwise than as mentioned in paragraph (c)) and substituting “security interests”; and
(e) omitting “chargee” (wherever occurring) and substituting “secured party”; and
(f) omitting “charged” (wherever occurring) and substituting “secured”.
50 Section 9 (subparagraph (a)(ii) of the definition of control day)
51 Section 9 (paragraph (b) of the definition of controller)
52 Section 9 (definition of debenture)
53 Section 9 (definition of decision period)
54 Section 9 (definition of enforce, except paragraph (e) of the definition)
Note: Paragraph (e) of the definition of enforce in section 9 is repealed and a new paragraph substituted by item 142 in this Schedule.
55 Paragraph 157A(5)(b)
56 Section 283BE
Note: The heading to section 283BE is altered by omitting “charges” and substituting “security interests”.
57 Paragraph 283BF(4)(f)
58 Subsection 283BF(4) (note)
59 Subparagraph 283BF(7)(b)(ii)
60 Paragraphs 283BH(3)(a) and (b)
61 Section 283CC
Note: The heading to section 283CC is altered by omitting “charges” and substituting “security interests”.
62 Subsection 413(2)
63 Paragraphs 418A(1)(b) and (2)(b)
64 Subsections 419(1) and (2)
65 Paragraph 420(2)(s)
66 Paragraph 420B(2)(a)
67 Subsection 420B(4)
68 Paragraphs 420B(6)(a) and (b)
69 Subsection 427(1A)
70 Sub‑subparagraph 429(2)(c)(iii)(B)
71 Subparagraphs 432(1A)(c)(ii), (iii) and (iv)
72 Paragraphs 434B(5)(a), (b) and (c)
73 Subsection 434C(1)
74 Subsections 441B(1) and (2)
Note: The heading to section 441B is altered by omitting “charge” and substituting “security interest”.
75 Paragraph 441B(3)(a)
76 Paragraphs 441D(1)(a) and (b)
77 Subsection 441D(2)
78 Subsection 449C(2) (subparagraph (b)(iii) of the definition of appointer)
79 Paragraphs 450A(3)(a) and (b)
80 Subsection 534(3)
81 Subsection 588E(1) (paragraph (c) of the definition of recovery proceeding)
82 Paragraph 593(5)(b)
83 Subsection 593(7)
84 Paragraph 596(1)(b)
85 Paragraph 981E(2)(b)
Part 4—Floating charges
86 Paragraph 124(1)(f)
Omit “floating charge”, substitute “circulating security interest”.
87 Paragraph 433(2)(a)
Omit “floating charge” (wherever occurring), substitute “circulating security interest”.
Note: The heading to section 433 is replaced by the heading “Property subject to circulating security interest—payment of certain debts to have priority”.
88 Section 442B
442B Dealing with property subject to circulating security interests
(1) This section applies if a security interest in property (the secured property) of a company under administration was a circulating security interest when the interest arose, but has stopped being a circulating security interest because:
(a) in the case of a PPSA security interest—the property has stopped being a circulating asset (within the meaning of the Personal Property Securities Act 2009); or
(b) in the case of a security interest that was a floating charge when it arose—the floating charge has since become a fixed or specific charge.
Note: Section 442C deals with the disposal of encumbered property by an administrator. Section 442D makes the administrator’s functions and powers subject to those of a secured party, receiver or controller.
89 Section 443E
443E Right of indemnity has priority over other debts
(1) Subject to section 556, a right of indemnity under section 443D has priority over:
(a) all the company’s unsecured debts; and
(b) any debts of the company secured by a PPSA security interest in property of the company if, when the administration of the company begins, the security interest is vested in the company because of the operation of any of the following provisions:
(i) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(ii) section 588FL of this Act (collateral not registered within time); and
(c) subject otherwise to this section—debts of the company secured by a circulating security interest in property of the company.
Debts secured by circulating security interests—receiver appointed before the beginning of administration etc.
(2) A right of indemnity under section 443D does not have priority over debts of the company under administration that are secured by a circulating security interest in property of the company, except so far as the secured party agrees, if:
(a) before the beginning of the administration, the secured party:
(i) appointed a receiver of property of the company under a power contained in an instrument relating to the security interest; or
(ii) obtained an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or
(iii) entered into possession, or assumed control, of property of the company for that purpose; or
(iv) appointed a person so to enter into possession or assume control (whether as agent for the secured party or for the company); and
(b) the receiver or person is still in office, or the secured party is still in possession or control of the property.
Debts secured by circulating security interests—receiver appointed during administration etc.
(a) debts of a company under administration are secured by a circulating security interest in property of the company; and
(b) during the administration, the secured party, consistently with this Part:
(i) appoints a receiver of property of the company under a power contained in an instrument relating to the security interest; or
(ii) obtains an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or
(iii) enters into possession, or assumes control, of property of the company for that purpose; or
(iv) appoints a person so to enter into possession or assume control (whether as agent for the secured party or for the company).
(4) A right of indemnity of the administrator under section 443D has priority over those debts only in so far as it is a right of indemnity for debts incurred, or remuneration accruing, before written notice of the appointment, or of the entering into possession or assuming of control, as the case may be, was given to the administrator.
Debts secured by circulating security interests—priority over right of indemnity in relation to repayment of money borrowed etc.
(5) A right of indemnity under section 443D does not have priority over debts of the company under administration that are secured by a circulating security interest in property of the company, except so far as the secured party consents in writing, to the extent that the right of indemnity relates to debts incurred for:
(a) the repayment of money borrowed; or
(b) interest in respect of money borrowed; or
(c) borrowing costs.
90 Paragraph 459C(2)(c)
Omit “floating charge on”, substitute “circulating security interest in”.
91 Paragraph 459C(2)(d)
Omit “charge”, substitute “security interest”.
92 Paragraph 459C(2)(f)
Omit “chargee”, substitute “secured party”.
93 Section 561
Omit “chargee in relation to a floating charge”, substitute “secured party in relation to a circulating security interest”.
Note: The heading to section 561 is altered by omitting “floating charges” and substituting “circulating security interests”.
94 Section 561
Omit “that charge”, substitute “the circulating security interest”.
95 Paragraph 588FJ(1)(b)
Note: The heading to section 588FJ is altered by omitting “Floating charge” and substituting “Circulating security interest”.
96 Subsection 588FJ(2)
Omit “charge” (first occurring), substitute “circulating security interest”.
97 Paragraph 588FJ(2)(a)
Omit “charge”, substitute “circulating security interest”.
98 Paragraphs 588FJ(4)(a) and (b)
99 Subsection 588FJ(6)
100 Subsection 588FJ(6)
101 Subsection 588FJ(6) (definition of realisation costs)
Part 5—Security
102 Paragraph 12.5 of the small business guide in Part 1.5
Omit “security over”, substitute “security interests in”.
103 Paragraph 124(1)(e)
104 Paragraph 283BF(4)(g)
Omit “security or the interests”, substitute “security interests or other interests”.
105 Subsections 444D(2) and 444F(2)
Omit “security”, substitute “security interest”.
106 Paragraph 444F(3)(a)
107 Section 471C
108 Subsection 510(2)
Omit “security or liens”, substitute “any security interests”.
109 Subsection 510(3)
Omit “security or lien”, substitute “security interest”.
110 Subsections 554E(3) to (6)
111 Subsections 554F(1), (2), (3) and (5)
Omit “security” (wherever occurring), substitute “security interest”.
Note: The heading to section 554F is altered by omitting “security” and substituting “security interest”.
112 Subsection 554G(1)
113 Paragraphs 554G(2)(a) and (b)
114 Section 554J
Note: The heading to section 554J is altered by omitting “security” and substituting “security interest”.
115 Paragraphs 571(6)(b) and (7)(b) and 579E(6)(b) and (7)(b)
Part 6—Mortgages and mortgagees
116 Paragraph 8 of the small business guide in Part 1.5
Omit “mortgage or charge over”, substitute “security interest in”.
117 Paragraph 448C(1)(d)
Omit “mortgagee of”, substitute “secured party in relation to”.
118 Paragraph 467(2)(a)
119 Subsection 505(2)
Omit “A conveyance, assignment, transfer, mortgage, charge or other disposition of a company’s property made by a liquidator”, substitute “A disposition of a company’s property by a liquidator (including a disposition by way of conveyance, assignment, transfer or an instrument giving rise to a security interest)”.
120 Subparagraph 532(2)(c)(ii)
121 Subsection 609(1)
Omit “mortgage, charge or other security”, substitute “security interest”.
122 Paragraphs 609(1)(a) and (b)
Omit “mortgage, charge or security”, substitute “security interest”.
123 Section 611 (table item 6)
Omit “a mortgage, charge or other security”, substitute “an instrument or agreement creating or giving rise to a security interest”.
124 Section 611 (paragraph (b) of table item 6)
Part 7—Liens and pledges
125 Paragraph 440JA(c)
Omit “lien or pledge”, substitute “possessory security interest”.
126 Paragraph 440JA(d)
Omit “holder of the lien or pledge”, substitute “secured party”.
127 Paragraph 442C(1)(a)
Omit “charge, lien or pledge”, substitute “security interest”.
128 Paragraph 442C(2)(b)
Omit “chargee, lienee, pledgee”, substitute “secured party”.
129 Subsection 442C(3)
130 Paragraph 442C(5)(a)
Omit “chargee, lienee or pledgee, as the case may be”, substitute “secured party”.
131 Paragraph 442C(7)
Omit “charge, lien or pledge” (wherever occurring), substitute “security interest”.
132 Paragraph 442CA(1)(b)
Note: The heading to section 442CA is altered by omitting “lien or pledge” and substituting “possessory security interest”.
133 Subsection 442CA(1)
134 Paragraph 442CA(2)(b)
135 Subsection 442CB(1)
(1) If the administrator of a company is entitled to dispose of property of the company by way of sale, and the property is subject to a security interest, the administrator must act reasonably in exercising a power of sale in respect of the property.
Note: A company’s property includes its PPSA retention of title property (see the definition of property applying to Part 5.3A, in section 435B).
Note: The heading to section 442CB is altered by omitting “lien or pledge” and substituting “security interest”.
136 Paragraph 442CC(1)(b)
Note: The heading to subsection 442CC(1) is altered by omitting “lien or pledge” and substituting “possessory security interest”.
137 Subparagraphs 442CC(1)(d)(i) and (ii) and (e)(i) and (ii)
138 Subsection 443F(2)
Omit “a charge”, substitute “another security interest”.
139 Subsection 443F(2)
Omit “the charge”, substitute “the other security interest”.
Part 8—PPSA retention of title property
140 Section 9 (definition of decision period)
Omit “in relation to a chargee in relation to a charge on property”, substitute “for a secured party in relation to a security interest in property (including PPSA retention of title property)”.
141 Section 9 (paragraph (a) of the definition of decision period)
142 Section 9 (paragraph (e) of the definition of enforce)
(ii) in the case of a PPSA security interest—under an agreement or instrument relating to a transaction or dealing giving rise to the security interest; or
143 Section 9 (paragraph (b) of the definition of transaction)
144 Paragraph 21(3)(f)
Omit “charge on property”, substitute “security interest in property, including PPSA retention of title property of the body”.
145 Subparagraph 60(1)(a)(vii)
(vii) a person who is entitled to enforce a security interest in the whole, or substantially the whole, of the company’s property (including any PPSA retention of title property); and
146 Section 283BG
283BG Exceptions to borrower’s duty to report to trustee and ASIC
Section 283BF does not apply in respect of:
(a) a borrower, while:
(i) it is under external administration; or
(ii) a receiver, or a receiver and manager, of property of the borrower has been appointed and has not ceased to act under that appointment; or
(b) a security interest in PPSA retention of title property.
147 Section 283CD
283CD Exceptions to guarantor’s duty to inform trustee
Section 283CC does not apply in respect of:
(a) the guarantor, while:
(ii) a receiver, or a receiver and manager, of property of the guarantor has been appointed and has not ceased to act under that appointment; or
148 Paragraph 411(7)(a)
149 Paragraph 411(7)(c)
Omit “mortgagee of property of the body”, substitute “secured party in relation to any property (including PPSA retention of title property) of the body”.
150 Paragraphs 418(1)(a) and (c)
Omit “mortgagee of property of the corporation”, substitute “secured party in relation to any property (including PPSA retention of title property) of the corporation”.
151 Subsection 419(1)
After “leased”, insert “(including a lease of goods that gives rise to a PPSA security interest in the goods)”.
152 At the end of subsection 419A(1)
; and (c) the third party property is not PPSA retention of title property of the corporation.
153 At the end of section 420
lease includes a lease of goods that gives rise to a PPSA security interest in the goods.
154 Section 435B
Note: See sections 9 (definition of property) and 51F (PPSA retention of title property). An extended definition of property applies in subsection 444E(3) (see subsection 444E(4)).
155 At the end of section 437A
156 Sections 440B to 440C
440B Restrictions on exercise of third party property rights
(1) During the administration of a company, the restrictions set out in the table at the end of this section apply in relation to the exercise of the rights of a person (the third party) in property of the company, or other property used or occupied by, or in the possession of, the company, as set out in the table.
Note: The property of the company includes any PPSA retention of title property of the company (see section 435B).
Exception—consent of administrator or leave of court
(2) The restrictions set out in the table at the end of this section do not apply in relation to the exercise of a third party’s rights in property if the rights are exercised:
(a) with the administrator’s written consent; or
Possessory security interests—continued possession
(3) If a company’s property is subject to a possessory security interest, and the property is in the lawful possession of the secured party, the secured party may continue to possess the property during the administration of the company.
Restrictions on exercise of third party rights
If the third party is …
a secured party in relation to property of the company, and is not otherwise covered by this table
the third party cannot enforce the security interest.
a secured party in relation to a possessory security interest in the property of the company
the third party cannot sell the property, or otherwise enforce the security interest.
a lessor of property used or occupied by, or in the possession of, the company, including a secured party (a PPSA secured party) in relation to a PPSA security interest in goods arising out of a lease of the goods
(a) distress for rent must not be carried out against the property;
(b) the third party cannot take possession of the property or otherwise recover it;
(c) if the third party is a PPSA secured party—the third party cannot otherwise enforce the security interest.
an owner (other than a lessor) of property used or occupied by, or in the possession of, the company, including a secured party (a PPSA secured party) in relation to a PPSA security interest in the property
(a) the third party cannot take possession of the property or otherwise recover it;
(b) if the third party is a PPSA secured party—the third party cannot otherwise enforce the security interest.
157 Subsections 441F(2) and 441G(1)
Omit “440C”, substitute “440B”.
158 Paragraph 442C(1)(b)
After “property”, insert “(other than PPSA retention of title property)”.
159 At the end of subsection 442C(1)
Note: PPSA retention of title property is subject to a PPSA security interest, and so is covered by paragraph (a) (see definition of PPSA retention of title property in section 51F).
160 Paragraph 442C(8)(c)
(i) the property is PPSA retention of title property; or
(ii) the property is subject to a retention of title clause under a contract; and
161 After subsection 442CC(1)
(1A) If the administrator of a company disposes of PPSA retention of title property of the company by way of sale, then the administrator must apply the net proceeds of the sale in the same way as a secured party is required, under section 140 of the Personal Property Securities Act 2009, to apply an amount, personal property or proceeds of collateral received by the secured party as a result of enforcing a security interest in the property.
162 At the end of subsection 442CC(2)
163 Paragraph 443A(1)(c)
After “occupied”, insert “, including property consisting of goods that is subject to a lease that gives rise to a PPSA security interest in the goods”.
164 At the end of subsection 443B(1)
Add “, including property consisting of goods that is subject to a lease that gives rise to a PPSA security interest in the goods”.
Note 1: The following heading to subsection 443B(1) is inserted “Scope”.
Note 2: The following heading to subsection 443B(2) is inserted “General rule”.
165 After subsection 443B(3)
(3A) Subsection (3) does not apply to PPSA retention of title property.
Note: The following heading to subsection 443B(7) is inserted “Restrictions on general rule”.
166 Section 443D
After “property”, insert “(other than any PPSA retention of title property subject to a PPSA security interest that is perfected within the meaning of the Personal Property Securities Act 2009)”.
167 After subsection 444D(3)
(3A) Subsection (3) does not apply in relation to an owner or lessor of PPSA retention of title property of the company.
168 Subsection 444E(4) (definition of property)
property of a company includes:
(a) any PPSA retention of title property of the company; and
(b) any other property used or occupied by, or in the possession of, the company.
Note: See sections 9 (definition of property) and 51F (PPSA retention of title property).
169 After subsection 444F(4)
(4A) Subsection (4) does not apply in relation to PPSA retention of title property of the company.
170 Subsection 446C(8)
After “property of the company”, insert “(other than its PPSA retention of title property)”.
171 Before Division 1 of Part 5.4B
465 Definitions
property of a company includes PPSA retention of title property, if the security interest in the property is vested in the company because of the operation of any of the following provisions:
172 Subsection 474(1)
(1) If a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company has been appointed:
(a) in a case in which a liquidator or provisional liquidator has been appointed—the liquidator or provisional liquidator must take into his or her custody, or under his or her control, all the property which is, or which appears to be, property of the company; or
(b) in a case in which there is no liquidator—all the property of the company is to be in the custody of the Court.
173 Subsection 483(1)
After “property”, insert “of the company”.
174 Before Division 1 of Part 5.5
489F Definitions
175 Subsection 500(3)
176 At the end of Division 1 of Part 5.6
513AA Definitions
177 Subsection 568(1AA)
(1AA) This section does not apply to:
(a) an agreement by the company to buy back its own shares; or
(b) PPSA retention of title property that is taken to form part of the property of the company because of the definition of property in section 513AA.
Note: The definition of property in section 513AA includes PPSA retention of title property of the company, if the security interest in the property has vested in the company in certain situations.
178 At the end of section 588
179 Before section 588D
588C Definitions
180 Subsection 589(5)
181 Before section 601AA
182 Before Division 1 of Part 5B.2
601C Definitions
property of a corporation includes PPSA retention of title property, if the security interest in the property is vested in the corporation because of the operation of any of the following provisions:
Part 9—Special requirements for security interests
183 After Division 2 of Part 5.7B
Division 2A—Vesting of PPSA security interests if not continuously perfected
588FK Interpretation and application
(1) A word or expression used in this Division has the same meaning as in the Personal Property Securities Act 2009.
(2) Subsection (1) applies despite any other provision of this Act (subject to subsection (4)).
(3) For the purposes of this Division, whether or not a person has acquired actual or constructive knowledge of a circumstance is to be determined in accordance with sections 297 to 300 of the Personal Property Securities Act 2009.
PPSA security interest has the meaning given by section 51.
Note: As a result of this section, in this Division, company has the same meaning as in the Personal Property Securities Act 2009. At the time this section was enacted, section 10 of that Act provided that company means:
(a) a company registered under Part 2A.2 or Part 5B.1 of the Corporations Act 2001; or
(b) a registrable body that is registered under Division 1 or 2 of Part 5B.2 of that Act.
588FL Vesting of PPSA security interests if collateral not registered within time
(ii) an administrator of a company is appointed under section 436A, 436B or 436C;
(iii) a company executes a deed of company arrangement under Part 5.3A; and
(b) a PPSA security interest granted by the company in collateral is covered by subsection (2) or (3).
Note: A security interest granted by a company in relation to which paragraph (a) applies that is unperfected at the critical time may vest in the company under section 267 or 267A of the Personal Property Securities Act 2009.
Australian law governs security interest
(2) This subsection covers a PPSA security interest if:
(iii) if the security agreement giving rise to the security interest came into force under the law of a foreign jurisdiction, but the security interest first became enforceable against third parties under the law of Australia after the time that is 6 months before the critical time—the time that is the end of 56 days after the security interest became so enforceable, or the time that is the critical time, whichever time is earlier;
(iv) a later time ordered by the Court under section 588FM.
Note 1: For the meaning of critical time, see subsection (7).
Note 2: For when a security interest is enforceable against third parties under the law of Australia, see section 20 of the Personal Property Securities Act 2009.
Note 3: A security interest may become perfected at a particular time by a registration that is made earlier than that time, if the security interest attaches to the collateral at the later time (after registration). See section 21 of the Personal Property Securities Act 2009.
Foreign law governs security interest
(3) This subsection covers a PPSA security interest if:
(a) at the critical time, or, if the security interest arises after the critical time, when the security interest arises, the security interest is enforceable against third parties under the law of a foreign jurisdiction (the relevant foreign law); and
(b) the relevant foreign law provides for the public registration or recording of the security interest, or of a notice relating to the security interest; and
(c) the security interest or notice has not been so registered or recorded, in accordance with the relevant foreign law, before the latest of the following times:
(iii) if the security agreement giving rise to the security interest came into force under the law of a jurisdiction other than the relevant foreign law, but the security interest first became enforceable against third parties under the relevant foreign law after the time that is 6 months before the critical time—the time that is the end of 56 days after the security interest became so enforceable, or the time that is the critical time, whichever time is earlier;
Note: For the meaning of critical time, see subsection (7).
(4) The PPSA security interest vests in the company at the following time, unless the security interest is unaffected by this section because of section 588FN:
(a) if the security interest first becomes enforceable against third parties at or before the critical time—immediately before the event mentioned in paragraph (1)(a);
(b) if the security interest first becomes enforceable against third parties after the critical time—at the time it first becomes so enforceable.
(5) Subsection (4) does not affect the title of a person to personal property if:
(iii) the appointment of an administrator of the company under section 436A, 436B or 436C;
(iv) the execution of a deed of company arrangement by the company under Part 5.3A.
Note: For what is actual or constructive knowledge, see sections 297 and 298 of the Personal Property Securities Act 2009.
(6) In a proceeding in Australia under this Act, the onus of proving the fact that a person acquires personal property without actual or constructive knowledge as mentioned in paragraph (5)(b) lies with the person asserting that fact.
(a) if the company is being wound up—when, on a day, the event occurs by virtue of which the winding up is taken to have begun or commenced on that day under section 513A or 513B; or
(b) in any other case—when, on a day, the event occurs by virtue of which the day is the section 513C day for the company.
588FM Extension of time for registration
(1) A company, or any person interested, may apply to the Court (within the meaning of section 58AA) for an order fixing a later time for the purposes of subparagraph 588FL(2)(b)(iv) or (3)(c)(iv).
Note: Paragraphs 588FL(2)(b) and (3)(c) fix times within which certain events must take place (for example, registration under the Personal Property Securities Act 2009), failing which a PPSA security interest may vest in a company granting the security interest. The paragraphs only apply if an insolvency‑related event occurs in relation to the company under subsection 588FL(1).
(2) On an application under this section, the Court may make the order sought if it is satisfied that:
(3) The Court may make the order sought on any terms and conditions that seem just and expedient to the Court.
588FN PPSA security interests unaffected by section 588FL
(1) Subsection 588FL(4) (vesting of security interests in company) does not apply to a PPSA security interest provided for by any of the following transactions, if the interest does not secure the payment or performance of an obligation:
(a) the goods leased may or must be described by serial number in accordance with regulations made for the purposes of the Personal Property Securities Act 2009; and
(2) Subsection 588FL(4) (vesting of security interests in company) does not apply to a PPSA security interest in an account if all of the following conditions are satisfied:
(a) a person (the obligor) owes money to another person (the senior creditor);
(b) the obligor also owes money to a third person (the junior creditor);
(i) for the postponement or subordination of the obligor’s debt to the junior creditor, to the obligor’s debt to the senior creditor; and
(ii) in the event of the obligor’s debt to the junior creditor being discharged (whether wholly or partly) by the obligor transferring personal property to the junior creditor—for the junior creditor to transfer the property, or proceeds of the property, to the senior creditor to the value of the amount owed by the obligor to the senior creditor; and
(iii) in the event that the property or proceeds are not transferred—for the junior creditor to hold the property or proceeds on trust for the senior creditor to that value; and
(iv) in the event of such a trust arising—for a security interest to be granted by the junior creditor to the senior creditor over the personal property or proceeds securing payment of the obligor’s debt to the senior creditor;
(3) Subsection 588FL(4) (vesting of security interests in company) does not apply to a PPSA security interest covered by subsection 588FL(2) (Australian law governs security interest) if:
(a) before the critical time that applies under section 588FL, the company acquired, by transfer, the collateral in which the PPSA security interest is granted; and
(4) The period covered by this subsection:
(i) in a case in which the secured party consented to the transfer—the end of 5 business days after the day of the transfer;
(ii) in a case in which the secured party otherwise acquires the actual or constructive knowledge required to perfect the secured party’s interest by registration (or to re‑perfect the interest by an amendment of a registration)—the end of 5 business days after the day the secured party acquires the knowledge; and
(b) ends no earlier than at the critical time that applies under section 588FL.
588FO Certain lessors, bailors and consignors entitled to damages
(1) This section applies if either of the following PPSA security interests is vested in a company under section 588FL:
(a) a PPSA security interest of a consignor under a commercial consignment;
(b) a PPSA security interest of a lessor or bailor under a PPS lease.
Entitlement to damages and compensation
(2) The consignor, lessor or bailor:
(a) is taken to have suffered damage immediately before the PPSA security interest was vested in the company; and
(b) may recover an amount of compensation from the company equal to the greater of the following amounts:
(i) the amount determined in accordance with the consignment, lease or bailment;
(ii) the sum of the market value of the consigned, leased or bailed property immediately before the critical time that applies under section 588FL, and the amount of any other damage or loss resulting from the termination of the consignment, lease or bailment.
Note: The consignor, lessor or bailor may be able to prove the amount of compensation in proceedings related to the winding up of the company.
Division 2B—Security interests in favour of company officers etc.
588FP Security interests in favour of an officer of a company etc. void
(c) the secured party purports to take a step to enforce the security interest, within 6 months after the time (the relevant time) the instrument is made, without the leave of the Court under subsection (4).
(a) the person acquires the property for new value (within the meaning of the Personal Property Securities Act 2009) from any of the following persons (the seller):
184 At the end of subsection 1483(9)
Note: Section 440BA was repealed by the Personal Property Securities (Corporations and Other Amendments) Act 2010, and was replaced with a new section 440B incorporating the same substantive rules. Section 1506 preserves the operation of this subsection.
185 At the end of subsection 1483(10)
Note: Section 440BB was repealed by the Personal Property Securities (Corporations and Other Amendments) Act 2010, and was replaced with a new section 440B incorporating the same substantive rules. Section 1506 preserves the operation of this subsection.
186 After Part 10.12
Part 10.13—Transitional provisions relating to the Personal Property Securities (Corporations and Other Amendments) Act 2009
1498A Commencement of provisions in Part 10.13
Sections 1499 to 1510, which are inserted by the Personal Property Securities (Corporations and Other Amendments) Act 2010, are to commence at the registration commencement time within the meaning of section 306 of the Personal Property Securities Act 2009.
Note: See item 187 of Schedule 1 to the Personal Property Securities (Corporations and Other Amendments) Act 2010. The commencement of that item is provided for by section 2 of that Act.
187 Section 1498A
amending Act means the Personal Property Securities (Corporations and Other Amendments) Act 2010.
commencement time means the time item 187 of Schedule 1 to the amending Act commences.
Note: Item 187 of Schedule 1 to the amending Act inserts sections 1499 to 1510. The item commences at the registration commencement time within the meaning of section 306 of the Personal Property Securities Act 2009 (as provided by section 2 of the amending Act).
registrable charge means a charge created before the commencement time that was a registrable charge within the meaning of section 261 when it was created.
1500 Charges, liens and pledges—continuation of restriction of references
(1) This section applies despite the amendment of this Act made by item 10 of Schedule 1 to the amending Act if a reference to a charge in a provision of this Act, as in force immediately before the commencement time, did not include a reference to a lien or a pledge, or any other particular form of security over the property.
(2) In its application in relation to an interest in property created or arising before the commencement time, or under an agreement or instrument made before that time, the reference in that provision (as amended by the amending Act) to a security interest does not include a reference to a lien or a pledge, or that particular form of security over the property, as the case may be.
1501 References to security interests etc.
The amendments made by Part 1 (new concepts) of Schedule 1 to the amending Act apply:
(a) in relation to charges, liens and pledges, whether created or arising before, at or after the commencement time; and
(b) in relation to property owned, occupied or used by, or in the possession of, a corporation, whether the ownership, occupation, use or possession started before, at or after the commencement time.
1502 Repeal of Chapter 2K (charges)—general
(1) For the period of 7 years after the commencement time, the amendments made by Part 2 of Schedule 1 to the amending Act do not apply in relation to registrable charges.
Note: The amendments made by Part 2 of Schedule 1 to the amending Act repeal Chapter 2K and make consequential amendments to other provisions.
(2) This section applies subject to sections 1503 to 1506.
1503 Repeal of Chapter 2K (charges)—cessation of requirements in relation to documents or notices
(1) This section applies if, immediately before the commencement time, a document (however described) or notice is required to be lodged or given by a company or other person under one of the following provisions:
(a) paragraph 263(1)(a), (b) or (c);
(b) paragraph 263(2)(b);
(c) subsection 263(3);
(d) paragraph 264(1)(a) or (b);
(e) paragraph 265(6)(b);
(f) paragraph 268(1)(a) or (b);
(g) subsection 268(2);
(h) subsection 269(1) or (2);
(i) subsection 270(4).
Requirements that stop applying
(2) Whichever of the following requirements would otherwise apply stops applying at the commencement time:
1504 Repeal of Chapter 2K (charges)—application of section 266
(1) Subject to this section, section 266 stops applying at the commencement time in relation to registrable charges.
(2) However, if a registrable charge is void under section 266 immediately before the commencement time, that section continues to apply in relation to the charge, subject to subsection (3) of this section.
(3) The Court may, on such terms and conditions as seem to the Court just and expedient, by order, declare a registrable charge not to be, and never to have been, void under subsection 266(1) or (3), if:
1505 Repeal of Chapter 2K (charges)—cessation of company registration requirements
The requirements in section 271 (company documentation and registration of charges) stop applying in relation to registrable charges at the commencement time.
1506 Repeal of Chapter 2K (charges)—priority between registrable charges
At and after the commencement time, registrable charges have the priority between themselves that they would have had under this Act as in force immediately before the commencement time, subject to Chapter 9 (Transitional provisions) of the Personal Property Securities Act 2009.
1507 New section 440B (restrictions on third party property rights)
The repeal of sections 440B, 440BA, 440BB and 440C by item 156 of Schedule 1 to the amending Act does not affect the operation of subsections 1483(9) and (10) in relation to:
(a) the administration of a company that began at or after the start of the day section 440BA commenced, and before the commencement time within the meaning of section 1499; or
(b) distress for rent that began to be carried out before the day section 440BB commenced.
Note: Sections 440BA and 440BB commenced on 31 December 2007.
1508 New subsection 442CB(1) (administrator’s duty of care)
The amendment of this Act by item 135 of Schedule 1 to the amending Act does not apply in relation to the exercise of a power of sale if the power began to be exercised before the commencement time.
Note: Item 135 of Schedule 1 to the amending Act repealed subsection 442CB(1) and substituted a new subsection.
1509 New section 588FP (security interests in favour of an officer of a company etc. void)
Section 588FP does not apply in relation to a registrable charge.
1510 Winding up applied for at or after the commencement time
Subject to this Part, the amendments made by the amending Act do not apply in relation to the winding up of a company under Part 5.4, Part 5.4A or Part 5.4B, or the subsequent liquidation of the company, if the application for winding up for the purposes of those Parts is made before the commencement time.
Schedule 2—Personal Property Securities Act 2009
(a) it has attached to collateral; and
(b) certain extra steps (possession or control of the collateral, or registration on the Register of Personal Property Securities) have been taken to protect the interest, or the interest is perfected by force of this Act.
(b) it is enforceable against third parties; and
(c) certain extra steps (possession or control of the collateral, or registration on the Register of Personal Property Securities) have been taken to protect the interest.
Certain security interests are also declared to be temporarily perfected, or perfected, under this Act.
(f) rules about the transfer and assignment of interests in collateral (Part 2.7).
(f) rules about the transfer of interests in collateral (Part 2.7).
Chapter 9 also deals with references to charges and fixed and floating charges in this Act and in security agreements, and provides for an independent review of the Act within 3 years after it is enacted.
The Act starts to apply under Part 9.3 at the registration commencement time, which is 1 February 2012 (the first day of the month that is 26 months after this Act was given the Royal Assent), or an earlier time determined by the Minister.
Chapter 9 also deals with references to charges and fixed and floating charges in this Act and in security agreements, and provides for the review of the operation of the Act within 3 years after it starts to apply.
4 Paragraph 6(2)(c)
(c) the security interest is an interest of a transferor under a transfer of intangible property that consists of an account or chattel paper, and:
(i) the transferor is an Australian entity; or
(ii) the account or chattel paper is payable in Australia; or
5 At the end of subparagraph 8(1)(f)(v)
Add “, except a transfer of a right to an insurance payment or other payment as indemnity or compensation for loss of, or damage to, collateral (or proceeds of collateral)”.
6 Subparagraph 8(1)(f)(vi)
Omit “an assignment”, substitute “a transfer”.
7 Subparagraph 8(1)(f)(vi)
Omit “the assignment”, substitute “the transfer”.
8 Subparagraph 8(1)(f)(vii)
Omit “an assignment of an account, if the assignee’s”, substitute “a transfer of an account, if the transferee’s”.
9 Subparagraph 8(1)(f)(viii)
10 Subparagraph 8(1)(f)(x)
(x) a transfer of the beneficial interest in a monetary obligation where, after the transfer, the transferee holds the monetary obligation on trust for the transferor;
11 At the end of paragraph 8(1)(i)
12 After paragraph 8(1)(j)
(ja) a security interest in personal property taken by a pawnbroker, if subsection (6) applies to the security interest;
(jb) an interest that a person has:
(i) as a member of a superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or
(ii) as a member of an approved deposit fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or
(iii) as a holder of a retirement savings account (within the meaning of the Retirement Savings Accounts Act 1997); or
(iv) in an account kept under the Small Superannuation Accounts Act 1995 in the name of the person; or
(v) as a holder of a superannuation annuity (within the meaning of the Income Tax Assessment Act 1997);
(jc) a charge created by either of the following provisions:
(i) section 6 of the Commonwealth Inscribed Stock Act 1911;
(ii) section 5 of the Loans Redemption and Conversion Act 1921;
13 Subsection 8(4)
Omit “or assignment”.
Note: The heading to subsection 8(4) is altered by omitting “and assignments”.
14 At the end of section 8
(5) In paragraph (1)(i), the reference to a right in relation to the control, use or flow of water includes, but is not limited to, a reference to a right that a person has against another person to receive (or otherwise gain access to) water.
Pawnbroker security interests
(6) For the purposes of paragraph (1)(ja), this subsection applies to a security interest taken by a pawnbroker if:
(a) the pawnbroker holds a licence or is otherwise expressly authorised (for example, by registration) by a law of a State or Territory to carry on a pawnbroking business (however described in that law); and
(b) the taking of the security interest is authorised by that licence or authorisation, and is not in contravention of that law of the State or Territory; and
(c) the security interest is taken in the ordinary course of the pawnbroker’s business as a pawnbroker; and
(d) at the time the security interest is taken, the market value of the payment or obligation secured by the security interest is less than or equal to:
(ii) if a greater amount has been prescribed by regulations made for the purposes of subsection 47(1)—that amount; and
(e) at the time the security interest is taken, the pawnbroker believes, and it is actually the case, that the market value of the personal property is less than or equal to:
(ii) if a greater amount has been prescribed by regulations made for the purposes of paragraph 47(2)(c)—that amount; and
(f) the personal property is not of a kind that the regulations provide may, or must, be described by serial number in a registration.
Note: Section 47 deals with taking personal, domestic or household property free of a security interest.
15 Section 10 (paragraph (b) of the definition of description)
(b) in the case of a class of personal property—a description that identifies the class, including a description that identifies the class by identifying a larger class of personal property that wholly includes the class.
Example 1: A description that identifies collateral as “sheep” (a type of livestock) is sufficient to identify collateral that is sheep wool (a product of livestock, which is a class of collateral wholly included in the larger class of “sheep”).
Example 2: A description that identifies collateral as “fruit” is sufficient to identify collateral that is apples.
16 Section 10 (definition of financial product)
(a) for the purposes of the definition of investment instrument in this section—has the meaning given by the Corporations Act 2001; and
(b) for any other purposes—means any of the following, or an interest in any of the following, other than cash:
(ii) bonds;
(iii) any other financial instrument;
(iv) any other financial asset.
17 Section 10 (paragraph (a) of the definition of grantor)
Omit “owns the personal property, or has the interest in the personal property,”, substitute “has the interest in the personal property”.
18 Section 10 (at the end of the definition of intellectual property)
; (g) a right under or for the purposes of a law of a foreign country that corresponds to a right mentioned in any of paragraphs (a) to (f).
19 Section 10
intermediary has the meaning given by section 15.
intermediated security has the meaning given by section 15.
21 Section 10 (definition of investment entitlement)
22 Section 10 (definition of investment entitlement account)
23 Section 10 (definition of investment entitlement intermediary)
24 Section 10 (at the end of the definition of livestock)
; and (c) the products of livestock before they become proceeds (for example, the wool on a sheep’s back before the sheep is shorn).
25 Section 10 (paragraph (d) of the definition of negotiable instrument)
(d) any other writing that evidences a right to payment of currency, if:
(i) the writing is of a kind that, in the ordinary course of business, is transferred by delivery with any necessary endorsement or assignment; or
(ii) the writing satisfies the requirements for negotiability under the law governing negotiable instruments (including, but not limited to, instruments that are negotiable instruments within the meaning of this definition); or
26 Section 10 (at the end of the definition of new value)
Add “owed to the person providing the value”.
27 Section 10
referred PPS matters (short for referred Personal Property Securities matters) has the meaning given by section 245.
28 Section 10 (after paragraph (a) of the definition of registration time)
(aa) section 333 (registration with respect to migrated data); or
29 Section 10
securities account has the meaning given by section 15.
take has the meaning given by section 138A.
water source has the meaning given by section 138A.
32 Subsections 12(4) and (4A)
(3A) A person who owes payment or performance of an obligation to another person may take a security interest in the other person’s right to require the payment or the performance of the obligation.
(4) Without limiting subsection (3A):
(a) an account debtor, in relation to an account or chattel paper, may take a security interest in the account or chattel paper; and
(b) an ADI may take a security interest in an ADI account that is kept with the ADI.
(3) This section only applies to a bailment for which the bailee provides value.
34 Section 15
15 Meaning of intermediated security and related terms
Meaning of intermediated security
(1) An intermediated security is the rights of a person in whose name an intermediary maintains a securities account.
(2) An intermediary is:
(a) a person (including a central securities depository) who holds an Australian financial services licence (within the meaning of the Corporations Act 2001) permitting the person, in the course of business or other regular activity, to maintain securities accounts:
(i) on behalf of others; or
(ii) on behalf of others as well as on the person’s own behalf; or
(b) a person who operates a clearing and settlement facility under an Australian CS facility licence (within the meaning of the Corporations Act 2001), other than such a person prescribed by regulations made for the purposes of this paragraph; or
(c) a person (including a central securities depository) who holds a licence issued under the law of a foreign jurisdiction permitting the person, in the course of business or other regular activity, to maintain securities accounts:
(ii) on behalf of others as well as on the person’s own behalf.
(3) An intermediary does not include a central bank.
(4) An intermediary (including a central securities depository) is an intermediary only while acting in the capacity of an intermediary.
(5) A person is not an intermediary merely because the person maintains a securities account on behalf of the issuer of the financial products to which the account relates.
(6) Without limiting subsection (5), a person is not an intermediary merely because the person:
(a) acts as a central securities depository, registrar or transfer agent for an issuer of a financial product; or
(b) records details of interests in financial products in the person’s own books, being interests credited to securities accounts in the names of other persons for whom the person acts as manager or agent or otherwise in a purely administrative capacity.
Meaning of securities account
securities account means an account to which interests in financial products may be credited or debited.
35 Subsection 19(5)
After “leased”, insert “or bailed”.
Note: The heading to subsection 19(5) is altered by inserting “bailed,” after “leased,”.
36 At the end of section 19
Note: A security interest may attach to crops while they are growing, and to the products of livestock, before they become proceeds of the crops or livestock (for example, wool before it is shorn). See subsections 31(4) and (5) (meaning of proceeds) and section 84A (security interests in crops and livestock).
37 Subparagraph 20(2)(a)(ii)
Omit “specified in the writing that is”, substitute “, or omission, that reasonably appears to be”.
38 Paragraph 21(1)(b)
(i) the security interest is attached to the collateral;
(ii) the security interest is enforceable against a third party;
(iii) subsection (2) applies.
39 Subparagraph 21(2)(c)(i)
(i) an ADI account in relation to which the ADI is the secured party;
40 Paragraphs 24(5)(b) and (d)
Omit “assignee”, substitute “transferee”.
41 Section 26
26 Control of intermediated securities
(1) A person has control of an intermediated security that is credited to a securities account if, and only if, this section so provides.
Control by agreement
(2) A secured party has control of an intermediated security if:
(i) there is an agreement in force between the grantor, the secured party and the intermediary who maintains the securities account;
(ii) there is an agreement in force between the grantor and the intermediary;
(iii) there is an agreement in force between the grantor and the secured party, and notice of the agreement is given to the intermediary; and
(b) the agreement has the effect that:
(i) the intermediary must not comply with instructions given by the grantor in relation to the intermediated security without seeking the consent of the secured party (or a person who has agreed to act on the instructions of the secured party); or
(ii) the intermediary must comply, or must comply in one or more specified circumstances, with instructions (including instructions to debit the account) given by the secured party in relation to the intermediated security without seeking the consent of the grantor (or any person who has agreed to act on the instructions of the grantor).
(3) If the intermediary who maintains the securities account is an intermediary because of paragraph 15(2)(b), a reference to the intermediary in subparagraphs (2)(a)(i) to (iii) of this section includes a reference to a person prescribed by regulations made for the purposes of this subsection.
Note 1: Under paragraph 15(2)(b), a person is an intermediary if the person operates a clearing and settlement facility under an Australian CS facilities licence (within the meaning of the Corporations Act 2001), other than such a person prescribed by regulations made for the purposes of that paragraph.
Note 2: The regulations may prescribe a person by reference to a class or classes of persons (see subsection 33(3A) of the Acts Interpretation Act 1901).
Control by secured party in whose name securities account is maintained
(4) A secured party has control of an intermediated security if:
(a) the securities account is maintained in the secured party’s name; or
(b) the securities account is maintained in the name of another person (who is not the grantor or debtor), and that person acknowledges in writing that he, she or it holds the intermediated security on behalf of the secured party.
42 Paragraph 32(1)(a)
(a) continues in the collateral, unless:
(i) the secured party expressly or impliedly authorised a disposal giving rise to the proceeds; or
(ii) the secured party expressly or impliedly agreed that a dealing giving rise to the proceeds would extinguish the security interest; and
43 Paragraph 44(2)(b)
(b) the security interest was created or provided for by a transaction to which the buyer or lessee is a party, unless the personal property concerned is of a kind prescribed by regulations for the purposes of this paragraph.
44 Subsection 44(3)
45 Subsection 51(2)
(2) Subsection (1) does not apply if, at the time the interest is taken, the transferee has actual or constructive knowledge that crediting the interest in the financial product constitutes a breach of a security agreement that provides for a security interest in any intermediated security or financial product.
Note: The heading to section 51 is altered by omitting “investment entitlement” and substituting “intermediated security”.
46 Subsection 52(1)
Omit “(other than section 322)”, substitute “(or perfected by force of section 322)”.
47 Subsection 52(1) (note)
Note: Section 322 provides for the perfection of transitional security interests.
48 Section 54 (before the paragraph relating to Division 3)
For example, a security interest held by an ADI in an ADI account with the ADI has priority over any other security interest in the ADI account. An ADI has control over an ADI account held with the ADI (see section 25). Only the ADI with which an ADI account is held may perfect a security interest in the ADI account by control (see section 21). A security interest perfected by control has priority over any other security interest in the same collateral (see section 57).
49 Section 54 (paragraph relating to Division 6)
Division 6 deals with priorities in relation to the following:
(a) interests that arise under law;
(b) interests of execution creditors;
(c) security interests in returned goods;
(d) security interests in accounts, financial property or intermediated securities if a foreign law governs their perfection but does not provide for public registration.
50 After subsection 57(2)
(2A) A perfected security interest (the priority interest) in the proceeds of original collateral has priority over any other security interest in the proceeds, except a security interest in the proceeds as original collateral that is perfected by control, if:
(a) the security interest in the first‑mentioned original collateral was perfected by control when the collateral gave rise to proceeds; and
(b) the priority interest is not perfected by control.
51 Paragraphs 62(3)(b) and 63(c) and (d)
52 Subparagraph 64(1)(b)(ii)
Omit “5 business days”, substitute “15 business days”.
53 At the end of subsection 64(3)
; and (c) the new value is taken to be an account for the purposes of this Act (except for the purposes of this section or paragraph 12(3)(a) (account transferee’s interest taken to be security interest)).
54 At the end of section 64
(4) However, if the new value mentioned in paragraph (3)(c) would be an account for the purposes of this Act in the absence of that paragraph, the paragraph does not prevent the new value from being an account for the purposes of this section or paragraph 12(3)(a).
55 Paragraph 68(2)(c)
Omit “transferee‑granted interest”, substitute “collateral”.
56 Paragraph 68(2)(d)
(d) the transferee‑granted interest secures performance of an advance made, or an obligation incurred, by the transferee’s secured party before:
(i) the transferor‑granted interest is re‑perfected as mentioned in paragraph (1)(d); and
(ii) the notice is given under paragraph (1)(e);
but only to the extent of the advance or obligation.
Note: The amendment made by this item corrects a formatting error.
57 Subsection 71(1) (note)
Omit “assignment”, substitute “transfer”.
58 Subparagraph 72(b)(ii)
Omit “negotiable instrument”, substitute “document of title”.
59 Subsection 77(3)
Omit “financial property or an investment entitlement”, substitute “personal property that is financial property or an intermediated security”.
Note: The heading to subsection 77(3) is replaced by the heading “Security interests in financial property and intermediated securities”.
60 Subsection 77(3)
Omit “the financial property or investment entitlement”, substitute “the personal property”.
61 Paragraphs 77(3)(a) and (b)
Omit “property” (wherever occurring), substitute “personal property”.
62 Subsection 77(4)
Omit “240(3)”, substitute “240(4) or (5)”.
63 Part 2.7 (heading)
Part 2.7—Transfer of interests in collateral
64 Section 78
This Part deals with the transfer and assignment of interests in collateral.
This Part deals with the transfer of interests in collateral.
65 Section 83
This Part includes rules on 3 topics:
(a) the relationship between a security interest in crops and interests in the land on which the crops are growing; and
(b) the capacity for a security interest to attach to crops while they are growing, and to the products of livestock, before the crops or products become proceeds (for example, the wool on a sheep’s back before it is shorn); and
(c) the priority to be given to security interests in crops (and proceeds) granted to enable the crops to be produced, and security interests in livestock (and proceeds) granted to enable the livestock to be fed and developed.
Other provisions of this Act that deal with agricultural interests are subsections 31(4), (5) and (6) (meaning of proceeds of crops and livestock) and Division 6 of Part 4.3 (enforcement of security interests in crops and livestock).
66 After section 84
84A Attachment of security interests to crops while they are growing and to the products of livestock
Security interest in crops while they are growing
(1) To avoid doubt, a security interest may attach to crops while they are growing.
Security interest in the products of livestock
(2) To avoid doubt, a security interest may attach to the products of livestock before they become proceeds (for example, the wool on a sheep’s back before the sheep is shorn).
Note 1: Livestock includes the products of livestock before they become proceeds (see section 10).
Note 2: For what are the proceeds of crops and livestock, see subsections 31(4), (5) and (6).
67 Section 85
Omit “in crops has priority over any other security interest in crops that is granted by the same grantor in the same crops”, substitute “that is granted by a grantor in crops or the proceeds of crops has priority over any other security interest that is granted by the same grantor in the same crops or proceeds”.
Omit “livestock has priority over any other security interest (other than a purchase money security interest) that is granted by the same grantor in the same livestock”, substitute “livestock or the proceeds of livestock has priority over any other security interest (other than a purchase money security interest) that is granted by the same grantor in the same livestock or proceeds”.
69 At the end of section 108
; (e) rules relating to the enforcement of security interests in crops and livestock.
70 After paragraph 109(5)(b)
(ba) section 126 (apparent possession of collateral);
71 After paragraph 115(1)(p)
(pa) Division 6 of Part 4.3 (seizure and disposal or retention of crops and livestock), or any particular provision of that Division;
72 Subsection 115(4)
73 At the end of section 116
(3) Despite subsection (1), if a grantor of a security interest in property is an individual, this Chapter applies in relation to the security interest while a person is a receiver, or a receiver and manager, of the property.
74 Section 122
If a secured party proposes to dispose of, or retain, collateral, the party must give notice to the grantor and any other secured party with a security interest in the collateral that has a higher priority.
A person may object to a proposal by a secured party to enforce a security interest by purchasing or retaining the collateral (see Division 5).
If a secured party proposes to dispose of, or retain, collateral, the party must give notice to the grantor and any other secured party with a security interest in the collateral that has a higher priority. A notice of disposal may be given in the approved form, while a notice of retention must be given in the approved form.
A person may object if a secured party proposes to enforce a security interest by purchasing or retaining the collateral (see Division 5).
A person exercising or discharging rights, duties and obligations arising under this Part must act honestly and in a commercially reasonable manner (see section 111).
75 At the end of subsection 126(1)
Note: This section does not apply in relation to collateral that is used predominantly for personal, domestic or household purposes (see subsection 109(5)).
76 Subsection 135(4)
Omit “may be given”, substitute “must be given”.
77 At the end of section 136
Extinguishment of obligation owed to the secured party
(5) If a secured party (the retaining secured party) takes collateral under this section free of the interests referred to in subsection (2):
(a) the debt or other obligation secured by the security interest held by the retaining secured party is extinguished; but
(b) paragraph (2)(c) does not have the effect that a debt or other obligation secured by another security interest in the collateral is extinguished, if the other security interest has a lower priority than the security interest of the retaining secured party.
78 At the end of Part 4.3
Division 6—Seizure and disposal or retention of crops and livestock
138A Meaning of take and water source
take fish includes:
(a) catch or kill fish; and
(b) gather or collect fish; and
(c) remove fish from any rock or other matter.
Note: Livestock includes fish (see section 10).
water source means:
(a) a river, lake, creek or pond, tidal waters or any other land that is submerged by water (whether permanently or intermittently or whether naturally or artificially); or
(b) any part of such a river, lake, creek or pond, tidal waters or submerged land.
138B Seizure and disposal or retention of crops
(1) Without limiting section 123 (secured party may seize collateral), for the purposes of seizing collateral under that section that is crops, or the proceeds of crops, the secured party may:
(a) take possession of the crops or the proceeds; or
(b) cut, gather or harvest the crops or the proceeds.
(2) The secured party may dispose of, or retain, collateral that is crops, or the proceeds of crops, after they have been taken, cut, gathered or harvested, subject to Divisions 2, 3, 4 and 5 (seizure, disposal or retention of collateral and objections).
(3) For the purposes of exercising a power under subsection (1) or (2), or performing any related function under Division 2, 3 or 4, the secured party may enter the land on which, or the water source in which, the crops are, or were, growing.
(4) However, the secured party may exercise the power to enter land or a water source under subsection (3) for a purpose mentioned in subsection (1) or (2) only to the same extent as the grantor would be entitled to enter the land or water source for the same purpose.
138C Seizure and disposal or retention of livestock
(1) Without limiting section 123 (secured party may seize collateral), for the purposes of seizing collateral under that section that is livestock, or the proceeds of livestock, the secured party may:
(a) take possession of the livestock or proceeds wherever it is located; or
(b) slaughter the livestock wherever it is located; or
(c) take livestock that is fish; or
(d) extract products from livestock (for example, by shearing sheep to extract wool).
Note: A security interest may attach to a livestock product (for example, the wool of a sheep) as original collateral as mentioned in subsection 84A(2), or as proceeds.
(2) The secured party may dispose of, or retain, collateral that is livestock, or the proceeds of livestock, after it has been taken, slaughtered or extracted, subject to Divisions 2, 3, 4 and 5 (seizure, disposal or retention of collateral and objections).
(3) For the purposes of exercising a power under subsection (1) or (2), or performing any related function under Division 2, 3 or 4, the secured party may enter the land on which, or the water source in which, the livestock or proceeds is located.
79 At the end of section 139
80 After subsection 140(1)
(1A) This section does not prevent the operation of another law of the Commonwealth, or a law of a State or Territory, to the extent that the law requires the amount, personal property or proceeds to be applied towards one or more obligations to persons that do not hold security interests (or any other interests) in the collateral before being applied towards any (or all) of the obligations mentioned in subsection (2).
Example: This section does not prevent the operation of section 561 of the Corporations Act 2001, which gives priority to the satisfaction of certain unsecured obligations over the claims of a secured party holding a circulating security interest in a debtor’s property.
81 Section 141
Omit “, if the grantor could take those steps”, substitute “that the person whose title to the collateral is extinguished because of the disposal or retention could take”.
82 At the end of subsection 151(1) (after the note)
Example 1: A person applies to register a financing statement that describes collateral as “all present and after‑acquired property” of the grantor described in the statement. It is sufficient to comply with this subsection if the applicant believes on reasonable grounds that the secured party described in the statement will take a security interest in a particular class of items of personal property held (or later acquired) by the grantor (see paragraph (b) of the definition of description in section 10).
Example 2: A person applies to register a financing statement that describes collateral as “fruit”. It is sufficient to comply with this subsection if the applicant believes on reasonable grounds that the secured party described in the statement will take a security interest in apples (see paragraph (b) of the definition of description in section 10).
83 Paragraph 174(2)(c)
(c) the chronological order of any of the events mentioned in paragraph (b), in relation to one or more registrations.
84 Subsection 178(3)
Omit “collateral that is consumer property.”, substitute:
collateral that:
(a) at the time the security interest attached to the collateral, the grantor intended to use predominantly for personal, domestic or household purposes; or
(b) the grantor is using predominantly for personal, domestic or household purposes.
85 Paragraph 237(2)(b)
86 Subsection 239(3)
(3) In relation to a security interest in intellectual property or an intellectual property licence:
(a) subject to paragraph (c), the validity of the security interest is governed by the law of the jurisdiction (other than the law relating to conflict of laws) in which the grantor is located when the security interest attaches, under that law, to the property or licence; and
(b) subject to paragraph (c), at a particular time, the perfection, and the effect of perfection or non‑perfection, of the security interest is governed by the law of the jurisdiction (other than the law relating to conflict of laws) in which the grantor is located at that time; and
(c) the following matters are governed by the law of the jurisdiction (other than the law relating to conflict of laws) by or under which the property or licence is granted, if that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest:
(i) whether a successor in title to the grantor’s interest in the property or licence takes it free of a security interest;
(ii) the validity of the security interest against a transferee of the property or licence.
87 Subsections 241(1) and (2)
Omit “, other than proceeds that are an account,”.
88 At the end of section 241
(4) However, this section does not apply in relation to proceeds that are an account unless the account arises from the dealing that gave rise to the proceeds.
Note: If this section does not apply in relation to proceeds that are an account, the law governing the validity and the perfection of a security interest consisting of a transfer of the account is determined by the law of the jurisdiction in which the grantor is located (see section 239 (governing laws—intangible property)).
89 Before section 242
90 Section 242
(a) this Act operates in any State that has referred to the Commonwealth power to enact and amend it for the purposes of paragraph 51(xxxvii) of the Constitution;
(b) this Act operates in that State and any other State, to the extent that other constitutional powers permit its operation;
(a) this Act operates in any State that has given the Commonwealth power to legislate accordingly for the purposes of paragraph 51(xxxvii) of the Constitution;
(b) this Act operates in any State to the extent that other constitutional powers permit its operation;
91 After section 242
Division 2—Constitutional basis
92 Paragraph 243(1)(b)
Omit “in respect of matters to which this Act relates because those matters are referred to it”, substitute “because of a reference or adoption”.
93 Subsection 243(1) (note 1)
94 Subsection 243(1) (note 2)
95 Subsections 244(1) and (2)
(1) A State is a referring State if, for the purposes of paragraph 51(xxxvii) of the Constitution, the Parliament of the State has, before the registration commencement time:
(a) referred the matters covered by subsections (3) and (4) to the Commonwealth Parliament; or
(ii) referred the matters covered by subsection (4) to the Commonwealth Parliament.
Note 1: For registration commencement time, see section 306.
Note 2: Subsections (5), (6) and (7) deal with when a State stops being a referring State.
(a) the reference to the Commonwealth of a matter covered by subsection (3) or (4) is to terminate in particular circumstances; or
(c) any or all of the State’s amendment references have not commenced in relation to a particular kind (or kinds) of personal property (or so commence at or after the registration commencement time); or
(i) if, and to the extent that, the matter is not otherwise included in the legislative powers of the Commonwealth Parliament (otherwise than by a reference under paragraph 51(xxxvii) of the Constitution); or
96 Subsection 244(3)
Omit “referral version”, substitute “relevant version”.
Note: The heading to subsection 244(3) is replaced by the heading “Reference covering the relevant version of this Act”.
97 Subsection 244(5)
(5) A State stops being a referring State if:
(b) in the case where the Parliament of the State has adopted the relevant version of this Act—the adoption terminates.
98 Subsections 244(6) and (7)
Omit “referring State”, substitute “referring State”.
99 Subsection 244(8) (definition of initial reference)
100 Subsection 244(8) (definition of referral law)
Omit “matters, as mentioned in subsection (1),”, substitute “the matters covered by subsection (4)”.
101 Subsection 244(8) (definition of referral version of this Act)
102 Subsection 244(8) (definition of referred provisions)
Omit “referral”, substitute “relevant”.
103 Subsection 244(8)
(b) otherwise—this Act as originally enacted, and as amended by the Personal Property Securities (Consequential Amendments) Act 2009 and the Personal Property Securities (Corporations and Other Amendments) Act 2010.
104 At the end of Part 7.3
Division 3—Constitutional guarantees
252A No constitutional preference to one State over another
A provision of this Act does not apply to the extent that the operation of the provision would give, or result in the giving of, preference (within the meaning of section 99 of the Constitution) to one State or part of a State over another State or part of a State.
252B No unjust acquisition of property
(1) A provision of this Act does not apply to the extent that the operation of the provision would result in an acquisition of property from a person otherwise than on just terms.
105 Paragraph 254(2)(h) (after paragraph (c) of the note)
(ca) section 140 (distribution of proceeds received by secured party);
106 Section 260
Note: This section is reproduced in a different form at section 252A, inserted by item 104 of this Schedule.
107 Subsection 267(1) (note 2)
Omit “section 266”, substitute “sections 266 and 267”.
Note: Note 2 to subsection 267(1) will be further amended to take account of the amendments of the Corporations Act 2001 in Schedule 1 to this Act when item 108 of this Schedule commences.
108 Subsection 267(1) (note 2)
Omit “sections 266 and 267”, substitute “Division 2A of Part 5.7B”.
Note: Division 2A of Part 5.7B of the Corporations Act 2001 is inserted by the amendments of the Corporations Act 2001 in Part 9 of Schedule 1 to this Act. This item will commence at the same time as Part 9 of Schedule 1 to this Act, which commences at the registration commencement time within the meaning of the Personal Property Securities Act 2009.
109 Subsection 267(3) (at the end of the note)
Add “under this subsection”.
110 After section 267
267A Vesting in grantor of security interest that attaches after winding up etc.
Vesting of security interest
(1) A security interest vests in the grantor when it attaches to the collateral if:
(a) paragraph 267(1)(a) applies in relation to the grantor; and
(b) before the time (the critical time) mentioned in paragraph 267(1)(b), the grantor enters into a security agreement with the secured party that provides for the secured party to take a security interest in collateral from the grantor; and
(c) at the critical time:
(i) the security interest has not attached to the collateral; and
(ii) there is no registration that would perfect the security interest when it attaches to the collateral; and
(d) after the critical time, the security interest attaches to the collateral; and
(e) at the time of attachment:
(i) the security interest is unperfected; or
(ii) if the security interest is perfected, it is perfected only by a registration for which the registration time is after the critical time.
Note: This section does not apply to certain security interests (see section 268).
(2) Subsection (1) does not affect the title of a person to personal property if:
(iii) the appointment of an administrator of the company under section 436A, 436B or 436C of the Corporations Act 2001;
(iv) the execution of a deed of company arrangement by the company.
Note: Section 296 deals with the onus of proving matters under this subsection.
111 Subsection 268(1)
Omit “Subsection 267(2) (security interests vested in grantor) does not apply”, substitute “Subsection 267(2) and section 267A (security interests vested in grantor) do not apply”.
112 After paragraph 268(1)(a)
(aa) a security interest for which perfection, and the effect of perfection or non‑perfection, is governed by the law of a foreign jurisdiction at the time mentioned in paragraph 267(1)(b);
113 Subsection 269(1)
After “section 267”, insert “or 267A”.
114 Paragraph 269(2)(a)
(a) is taken to have suffered damage immediately before the time the security interest vests in the grantor under section 267 or 267A (as the case requires); and
115 Subparagraph 269(2)(b)(ii)
Omit “day referred to in paragraph 267(1)(b)”, substitute “time mentioned in paragraph 267(1)(b)”.
116 Section 304
Part 9.3 deals with the initial application of this Act. Generally speaking, the Act starts to apply at the registration commencement time, which is 26 months after the Act is given the Royal Assent, or an earlier time determined by the Minister.
Part 9.3 deals with the initial application of this Act. Generally speaking, the Act starts to apply at the registration commencement time, which is 1 February 2012 (the first day of the month that is 26 months after this Act was given the Royal Assent), or an earlier time determined by the Minister.
117 Section 304
This includes rules for determining priority between these interests and the vesting and extinguishment of interests in some situations.
This includes rules about the attachment, perfection and priority of transitional security interests.
118 Section 307 (definition of transitional security agreement)
transitional security agreement means a security agreement that is in force immediately before the registration commencement time, and that continues in force at and after that time.
119 Section 311
311 Enforceability of transitional security interests against third parties
Despite section 20, a transitional security interest is enforceable against a third party in respect of particular personal property if it would have been so enforceable under the law that applied to the enforceability of security interests immediately before the registration commencement time, and as if this Act had not been enacted (whether the security interest arises before, at or after the registration commencement time).
120 Section 313
313 Enforcement of security interests in intellectual property licences
Section 106 applies in relation to security interests in intellectual property licences only if the security interests are provided for by security agreements made at or after the registration commencement time.
121 Divisions 1 to 5 of Part 9.4
319 Guide to this Part
This Part deals with the transitional application of this Act.
This Part applies to transitional security interests, which are security interests provided for by security agreements (transitional security agreements) in force immediately before the registration commencement time. A transitional security interest may arise before, at or after the registration commencement time.
The registration commencement time is 1 February 2012 (the first day of the month that is 26 months after this Act was given the Royal Assent), or an earlier time determined by the Minister.
Division 2 is about the attachment, perfection and priority of transitional security interests. Transitional security interests are declared to be perfected until the end of the month that is 24 months after the registration commencement time, or until they are earlier perfected by other means (for example, by registration).
Division 6 is about the migration of data about personal property from Commonwealth, State and Territory registers onto the Personal Property Securities Register. The Registrar may register migrated data about transitional security interests with effect from the registration commencement time. Such transitional security interests are known as migrated security interests.
Migrated security interests are perfected under Division 2 from immediately before the registration commencement time.
Division 7 provides for preparatory registration with respect to transitional security interests in anticipation of the commencement of the Personal Property Securities Register. Other data may also be registered under this Division before the registration commencement time.
Transitional security interests that are registered in this way are perfected under Division 2 from immediately before the registration commencement time.
Division 8 provides rules for dealing with defective registrations with respect to transitional security interests. For example, omissions arising from the migration of data onto the Personal Property Securities Register will not automatically render the registration of the data ineffective.
Division 2—Attachment, perfection and priority of transitional security interests
320 Guide to priority rules for transitional security interests
(1) The following table is a guide to how this Act applies to the determination of priorities involving transitional security interests:
has priority over …
(2) Other priorities involving transitional security interests are dealt with under this Division as follows:
(a) for the priority between 2 perfected transitional security interests, see section 323;
(b) for the priority between 2 unperfected transitional security interests, see section 323;
(c) for the priority between 2 security interests, one or both of which is a transitional security interest, if the priority comes to be determined after the end of the month that is 24 months after the registration commencement time in circumstances involving insolvency or bankruptcy, see section 324.
(3) In this section, a reference to a perfected transitional security interest is taken to be a reference to a transitional security interest that has been continuously perfected, at the time the priority comes to be determined, since immediately before the registration commencement time.
321 Attachment rule
For the purposes of subparagraph 21(1)(b)(i) and section 55, a transitional security interest in collateral is taken to have attached to the collateral immediately before the registration commencement time, whether the security interest arises before, at or after the registration commencement time.
Note 1: Subparagraph 21(1)(b)(i) provides that unless a security interest in collateral is perfected by force of this Act, the security interest must have attached to the collateral in order to be perfected.
Note 2: Section 55 provides for the default rules for determining priority between security interests in the same collateral. In some cases, these rules depend on when a security interest attaches. For example, the priority between 2 unperfected security interests is generally determined by their order of attachment (see subsection 55(2)).
However, 2 unperfected transitional security interests have the priority they would have had between themselves if this Act had not been enacted (see section 323).
Note 3: See section 320 for a general summary of priority rules as they affect transitional security interests.
322 Perfection rule
(1) A transitional security interest in collateral is perfected from immediately before the registration commencement time, whether the security interest arises before, at or after the registration commencement time (including a transitional security interest that arises after the end of the month that is 24 months after the registration commencement time).
Note 1: As a result of this subsection, the priority time for a transitional security interest under subsection 55(4) will be immediately before the registration commencement time, as long as the security interest remains continuously perfected.
Note 2: See section 320 for a general summary of priority rules as they affect transitional security interests.
(2) However, the transitional security interest stops being perfected under subsection (1) at the earliest of the following times:
(a) when the security interest is perfected by registration under Division 6 (migration of personal property interests);
(b) when the security interest is perfected by preparatory registration under Division 7;
(c) when a registration under Division 6 or 7 is amended so that the registration perfects the security interest;
(d) when the security interest is otherwise perfected by registration, or is perfected by possession or control;
(e) when the security interest is otherwise perfected (but not temporarily perfected) by this Act, other than under this section;
(f) the end of the month that is 24 months after the registration commencement time.
Note: In the case of a transitional security interest in collateral that does not arise until after the end of the month that is 24 months after the registration commencement time, this section has the same effect as for other transitional security interests. In particular:
(a) if a financing statement describing the collateral is registered before the end of that month, by the operation of sections 21, 55, 321 and this section, the security interest is continuously perfected from the registration time for the collateral until the registration stops being effective; and
(b) if the security interest is not perfected (otherwise than under this section) at the end of the month that is 24 months after the registration commencement time, the security interest will become unperfected at that time.
(3) Subsections (1) and (2) do not apply to a transitional security interest in collateral if the interest is of a class prescribed by regulations made for the purposes of this subsection.
323 Priority rule—priority otherwise undetermined
If the priority between 2 transitional security interests is not otherwise able to be determined under this Act, they have the priority between themselves that they would have had under the law that applied to such priority immediately before the registration commencement time, and as if this Act had not been enacted.
Note: The priority between the following transitional security interests is not otherwise able to be determined under this Act:
(a) 2 unperfected transitional security interests (because of section 321, the order of attachment between these interests cannot be determined for the purposes of subsection 55(2));
(b) 2 transitional security interests that have been continuously perfected since immediately before the registration commencement time (because of sections 321 and 322, the order of the priority times for these interests cannot be determined for the purposes of subsection 55(4)).
324 Priority rule—certain security interests upon insolvency or bankruptcy
(1) The priority between 2 security interests in the same collateral is to be determined under this Act, as if section 322 had not been enacted, if:
(a) the priority between the security interests comes to be determined after the end of the month that is 24 months after the registration commencement time; and
(b) either (or each) of the interests is a transitional security interest that has not been perfected, apart from under section 322; and
(c) the grantor or secured party in relation to either (or each) of the security interests is insolvent or bankrupt.
(2) Subsection (1) is in addition to, and does not derogate from, any other provision of this Division.
122 Paragraph 333(3)(a)
(i) if subsection (4) applies—state the transitional registration end time as the end time for the effective registration in respect of the personal property; or
(ii) if subsection (4) does not apply—not state an end time for the effective registration in respect of the personal property; and
123 Subsection 333(4)
(4) This subsection applies if, in the Registrar’s opinion, the registration of the interest in the personal property in the transitional register would have ended at a particular time (the transitional registration end time) in accordance with the law under which the transitional register was maintained (as in force immediately before the migration time).
(5) The registration time for the personal property is the registration commencement time.
Note: However, the migrated security interest in the personal property is perfected from immediately before the registration commencement time (see section 322).
124 Section 336
336 Preparatory registration—transitional security interests
Application for preparatory registration
(1) At or after the migration time, and before the registration commencement time, a person may apply to the Registrar, in the approved form, for the registration of any of the following:
(a) a financing statement that describes collateral with respect to a transitional security interest;
(b) a financing statement with respect to personal property prescribed by regulations made for the purposes of paragraph 148(c);
(c) a financing change statement to amend a financing statement mentioned in paragraph (a) or (b) that is registered under this section.
(2) The Registrar may accept an application made under subsection (1), but only if:
(a) in the case of a financing statement, or a financing change statement, with respect to a transitional security interest—the Registrar is satisfied on reasonable grounds that a transitional security interest will (whether before, at or after the registration commencement time) be:
(i) attached to the collateral; and
(ii) held by the applicant; and
(b) in any case—in the Registrar’s opinion, it is operationally practicable for the Registrar to register the financing statement, or financing change statement, before the registration commencement time.
(3) If the Registrar accepts the application for registration, the Registrar may register the financing statement (or financing change statement), in accordance with the application, before the registration commencement time.
Note: The Registrar must give a verification statement to a secured party affected by the registration.
(4) A registration under this section with respect to a transitional security interest must disclose that the collateral is covered by a transitional security agreement.
(5) In the case of a registration with respect to a transitional security interest, the registration time for the collateral is the registration commencement time.
Note: However, a transitional security interest in the personal property arising under the agreement is perfected from immediately before the registration commencement time, no matter whether the security interest arises before, at or after that time (see section 322).
(6) Chapter 5 (registration) applies in relation to an application for registration under this section, and to such a registration, subject to this section.
125 Section 337
337 Registration effective despite certain defects
(a) a registration describes collateral covered by a transitional security agreement; and
(b) the transitional security agreement has given rise to a transitional security interest; and
(c) the registration would not, apart from this section, be effective in respect of the collateral because of a defect in the registered data (including the omission of data); and
(d) the Registrar has made a determination under subsection (2) in relation to defects of that type; and
(e) the determination applies to the registration.
Note: Sections 164 and 165 provide that serious or misleading defects in a registration, and certain particular types of defect, make a registration ineffective.
(2) For the purposes of paragraph (1)(d), the Registrar may, by legislative instrument, determine that registrations in a stated class are effective despite stated types of defect.
(3) A determination under subsection (2) may provide that the determination does not apply in relation to a stated type of defect unless the registration includes particular data in relation to the defect (or in substitution for omitted data).
Registration temporarily unaffected by the defect
(4) Despite sections 164 and 165, the defect does not make the registration ineffective for the period starting at the registration time for the collateral and ending at the following time:
(a) if the financing statement, as initially registered, states an end time—that end time (or an earlier end time, if the registration is amended to state an earlier end time);
(b) if the financing statement, as initially registered, does not state an end time—the end of the month that is 60 months after the registration commencement time (or an earlier end time, if the registration is amended to state an end time).
Registration becomes ineffective
(5) However, the registration becomes ineffective under section 164 because of the defect immediately after the end of the period mentioned in subsection (4), unless, at or before that time, the registration is amended to correct the defect.
337A Registration defective if collateral is not covered by transitional security agreement
Without limiting section 164 (defects in registration), a registration that discloses that collateral is covered by a transitional security agreement is ineffective to the extent that it describes collateral that is not covered by a transitional security agreement.
126 Subsection 340(2) (note)
127 At the end of subsection 340(5)
128 Before subsection 341(1)
(1A) For the purposes of subsection 340(2), a secured party has control of personal property if:
(a) the secured party has control of the property within the ordinary meaning of the term “control”; or
(b) the secured party has control of the property within the meaning of Part 2.3 (possession and control of personal property); or
(c) in a case in which the personal property is inventory or an account—the secured party has control of the inventory or account because of:
(i) paragraph (a) or (b); or
(ii) subsection (1), (2), (3) or (4).
(1B) For the purposes of subsection 340(5) and this section:
(a) inventory has its ordinary meaning; and
(b) the definition of inventory in section 10 does not apply.
Note: The heading to section 341 is replaced by the heading “Meaning of control and inventory”.
129 Subsection 341(1)
Omit “For the purposes of determining whether inventory is a circulating asset under section 340, a secured party has control of the inventory if”, substitute “For the purposes of subsection 340(2), a secured party has control of inventory if”.
130 Subsection 341(2)
Omit “For the purposes of determining whether an account is a circulating asset under section 340”, substitute “For the purposes of subsection 340(2)”.
131 Subsection 341(2)
After “subsections (3) and (4)”, insert “of this section”.
132 Subsection 341(5)
133 Amendments to change references to investment entitlements etc. to references to intermediated securities etc.
The specified provisions of the Personal Property Securities Act 2009 listed in items 134 to 153 of this Schedule are amended by:
(a) omitting “investment entitlement intermediary” (wherever occurring) and substituting “intermediary”; and
(b) omitting “investment entitlement account” (wherever occurring) and substituting “securities account”; and
(c) omitting “investment entitlement” (wherever occurring otherwise than as mentioned in paragraph (a) or (b)) and substituting “intermediated security”; and
(d) omitting “entitlement” (wherever occurring otherwise than as mentioned in paragraphs (a), (b) and (c)) and substituting “intermediated security”; and
(e) omitting “investment entitlements” (wherever occurring) and substituting “intermediated securities”.
134 Subsection 6(1A)
135 Section 10 (paragraph (e) of the definition of account)
136 Section 10 (paragraph (d) of the definition of chattel paper)
137 Section 10 (definition of goods)
138 Section 10 (paragraph (c) of the definition of intangible property)
139 Section 10 (paragraph (m) of the definition of investment instrument)
140 Section 10 (paragraph (h) of the definition of negotiable instrument)
141 Paragraph 14(2)(b)
142 Subparagraph 21(2)(c)(ii)
143 Section 23
144 Section 30
145 Subsection 31(1) (subparagraph (c)(iv) of the definition of proceeds)
146 Subsection 31(1) (paragraph (e) of the definition of proceeds)
147 Subsection 32(2)
148 Paragraphs 41(g) and (i)
149 Paragraph 42(b)
150 Section 49
Note: The heading to section 49 is altered by omitting “entitlement” and substituting “intermediated security”.
151 Subsection 51(1)
152 Subsection 77(1)
153 Paragraph 109(3)(b)
Note: The heading to subsection 109(3) is altered by omitting “investment entitlements” and substituting “intermediated securities”.
1 Section 5 (definition of PPSA security interest)
Note: This amendment replaces the definition inserted by item 1 of Schedule 2 to the Personal Property Securities (Consequential Amendments) Act 2009.
2 Subsection 4(1) (definition of PPSA security interest)
Note: This amendment replaces the definition inserted by item 1 of Schedule 1 to the Personal Property Securities (Consequential Amendments) Act 2009.
3 At the end of section 35J
(4) Subsection 73(2) of the Personal Property Securities Act 2009 applies to the charge (to the extent, if any, to which that Act applies in relation to the property charged).
Note 1: The effect of this subsection is that the priority between the charge and a security interest in the property to which the Personal Property Securities Act 2009 applies is to be determined in accordance with this Act rather than the Personal Property Securities Act 2009.
Note 2: Subsection 73(2) of the Personal Property Securities Act 2009 applies to charges created by this section after the commencement of subsection (4) (which is at the registration commencement time within the meaning of the Personal Property Securities Act 2009).
4 Subsection 35L(4) (definition of registration authority)
registration authority, in relation to property of a particular kind, means:
(a) an authority responsible for administering a law of the Commonwealth, a State or a Territory providing for registration of title to, or charges over, property of that kind; or
(b) the Registrar of Personal Property Securities, if the Personal Property Securities Act 2009 provides for the registration of data in relation to that kind of personal property for the purposes of paragraph 148(c) of that Act.
Note: The Personal Property Securities Act 2009 provides for the registration of such data if regulations are made for the purposes of paragraph 148(c) of that Act.
6 Section 7 (definition of charge)
7 Section 7 (definition of debenture)
8 Subsections 489(5) and (6)
9 Paragraph 490(2)(c)
Omit “instrument;”, substitute “instrument.”.
10 Paragraph 490(2)(d)
11 Subsections 499(5) and (6)
12 Paragraph 500(2)(c)
13 Paragraph 500(2)(d)
14 Subsections 540(5) and 549(5)
15 Transitional—repeal of definition of debenture
The amendment made by item 7 applies in relation to dealings taking place after the time that item commences.
Note 1: Sections 468 and 520 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 are about dealings in series of debentures.
Note 2: Item 7 of this Schedule commences at the registration commencement time within the meaning of section 306 of the Personal Property Securities Act 2009 (as provided by section 2 of this Act).
16 Schedule 1 (Dictionary) (definition of PPSA security interest)
Note: This amendment replaces the definition inserted by item 14 of Schedule 2 to the Personal Property Securities (Consequential Amendments) Act 2009.
Note: The repealed item is redundant because of the amendment in item 2 of this Schedule.
18 At the end of section 142
19 At the end of section 143
registration of a charge on a particular kind of personal property within the meaning of the Personal Property Securities Act 2009 includes the registration of data in relation to that kind of property for the purposes of paragraph 148(c) of that Act.
Note: The Personal Property Securities Act 2009 provides for the registration of such data only if regulations are made for the purposes of paragraph 148(c) of that Act.
20 At the end of section 169
21 At the end of section 170
22 Section 302
Before “If a charge”, insert “(1)”.
23 At the end of section 302
(2) Subsection 73(2) of the Personal Property Securities Act 2009 applies to the commission’s charge (to the extent, if any, to which that Act applies in relation to the property charged).
Note 1: The effect of this subsection is that the priority between the commission’s charge and a security interest in the property to which the Personal Property Securities Act 2009 applies is to be determined in accordance with this Act rather than the Personal Property Securities Act 2009.
Note 2: Subsection 73(2) of the Personal Property Securities Act 2009 applies to commission charges created by section 300 after the commencement of subsection (2) (which is at the registration commencement time within the meaning of the Personal Property Securities Act 2009).
24 Section 302C
25 At the end of section 302C
26 After subsection 307(3)
(3A) Subsection 73(2) of the Personal Property Securities Act 2009 applies to a charge created by subsection (1) (to the extent, if any, to which that Act applies in relation to the property charged).
Note 2: Subsection 73(2) of the Personal Property Securities Act 2009 applies to charges created by subsection (1) after the commencement of subsection (3A) (which is at the registration commencement time within the meaning of the Personal Property Securities Act 2009).
27 At the end of section 307
28 Section 338 (definition of registration authority)
29 Subsection 3(1) (definition of PPSA security interest)
Note: This amendment replaces the definition inserted by item 19 of Schedule 1 to the Personal Property Securities (Consequential Amendments) Act 2009.
30 Section 6 (definition of PPSA security interest)
Note: This amendment replaces the definition inserted by item 18 of Schedule 2 to the Personal Property Securities (Consequential Amendments) Act 2009.
House of Representatives on 10 March 2010