MBA Lawyers Blog

“New Act overturns old ideas of title (by Martin Rasini – This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

GOLD Coast lawyers are urging businesses to come to grips with the Personal Properties Securities Act which overturns long-held concepts of ownership and title and provides methodologies to accord priority where more than one party has interest in an asset.  The Act, effective January 30, introduces a single regime based on the substance of a transaction and encompasses debentures, chattel mortgages, retention of title, hire purchase, leases exceeding one  year, assignments of debt, consignments, and security trust deeds.

It also creates a single register, the Personal Properties Securities Register, to replace all existing listings, including ASIC’s Registry of Charges and the Registry of Encumbered Vehicles.

Finance and hire purchase companies may lose goods if they fail to place their interests on the register, while businesses dealing in second hand items, such as vehicles, may find they are without rights to an asset if they don’t check the register before purchasing.

MBA Lawyers’ James Nickless says the Act streamlines insolvency but has wider application.  “The concept of title becomes eroded by the priority of security interest – defined as a transaction that ‘in substance secures the payment or performance of an obligation’.  The Act assumes that, in event of insolvency, an asset is available for sale regardless of title unless ‘security’ over it is ‘perfected’ by the true owner.  Title no longer delivers rights over assets.  To Secure interests over assets, it is essential to seek legal advice, develop a plan to minimise risk and list interests on the new register.”

Mr Nickless says it has been the case under law that a third party purchaser, without notice of another party’s interest, will gain title free and clear.  “This will no longer be the case,” he says.  “People buying items who don’t check the register will be deemed to have knowledge of an interest that will trump other rights.”

Justin Geddes, partner at law firm Derek Geddes, says while banks and financiers are across the changes, his firm is finding small to medium enterprises are not.  “Under the Act, a receiver, financier or third party may gain immediate control of all unregistered goods supplied if a customer goes bust.”

For guidelines visit ppsr.gov.au or call helpline 1300 007 777 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it