Personal Property & Securities Register (PPSR) Do you really know who owns that asset?

|by Steve Payne|Business Advisory

Although we have been operating under the Personal Property Securities Act 2009 (Cth) (PPSA) for a number of years (became law 30 January 2012), this area of law continues to generate disputes because of the complexity of the legislative regime and the ramifications of being an unsecured creditor of an insolvent entity.

In the current economic climate, it is possibly more relevant than ever to review your asset holdings and ensure that you are covered by having your interest “perfected” on the PPSR for any goods that you have situated outside your control.

What Is It?

If you are involved in buying, selling, leasing or hiring assets / goods, then you may be at risk if you have not registered your ownership interest.

The PPSR is a national online noticeboard that shows you whether someone is claiming an interest against goods or assets.

You can also make a registration, so others know when you have retained an interest in goods you are supplying. Meaning that, if your customer doesn’t pay or goes broke, you are in the best position to get your goods, or their value, back.


How does it work?

The register can offer your business risk protection, from losing the stake in your assets and can assist in raising finance, by using unencumbered assets as security for financiers.

Buying or Acquiring Personal Property – searching the register allows you to make an informed decision, because you can tell if the goods you are looking to buy are free from existing finance and safe from repossession.

Selling or Hiring / Leasing Goods – by properly registering your interest in goods you have in ongoing security interest in, ensures that you can obtain those goods back or be first in line to get your money back as a secured creditor.

A “Retention of Title Clause” on your contract, may not be sufficient to protect you in the event that your customer does not pay, and you may find yourself at the back of the queue of creditors.


What Personal Property is on the Register?

A security interest can be granted over almost anything of value, except for land, building and fixtures. Assets such as :

  • Motor vehicles, boats, aircraft
  • Crops, livestock, cattle, horses
  • Stock in Trade, artwork and equipment
  • Intangible property, patents, copyrights, licences
  • Shares, cash, cheques and other financial instruments

Can it happen to you?

Some case law decisions on the PPSA:

Keon Pty Ltd as trustee for Keon Family Trust v Goldfields Equipment Pty Ltd (In Liquidation) [2020]

  • Keon loaned $300K to Goldfields, secured by a deed detailing a floating mortgage charge over all business assets, but no other documents were executed
  • Liquidator was appointed to Goldfields, and Keon lodged claim as secured creditor under the deed and associated charge
  • Court held no claim for Keon as security documentation was insufficiently worded to create a floating charge, so Keon simply joined the long list of unsecured creditors

StockCo Agricapital Pty Ltd v Dairy Livestock Services Pty Ltd [2020]

  • Dispute came about after Dairy Livestock Traders (DLS) received a sum of money for selling several hundred cattle to Reid Agricultural (Reid) as stock and station agent
  • Reid had a credit account with DLS, and provided a Purchase Money Security Interest (PMSI) to DLS over the stock to be purchased as a surety of payment and this was perfected on the PPSR
  • Subsequently, StockCo provided funds to DLS to purchase the stock and they were granted their own PMSI on the PPSR – which was lodged after the Reid/DLS one was already in place
  • When the transaction took place and Reid paid DLS for the cattle, StockCo claimed that it was entitled to the Reid funds, under its terms of finance and priority PMSI
  • DLS contended that as the registration was after the date of its own PMSI with Reid, StockCo did not have a perfected registration and was not entitled to those funds
  • The court held that StockCo held a perfected PMSI over the cattle that it funded, despite the fact that Reid had taken possession of the cattle, prior to the StockCo PMSI being registered
  • It was held that StockCo was entitled to the funds from the sale and the physical “possession” by Reid was secondary to the “possession” granted by DLS to StockCo under it’s PMSI

BMW Australia Finance Ltd v Civic Park Medical Centre Pty Ltd atf Civic Park Medical Centre Unit Trust [2019]

  • BMW provided finance to its customers for the purchase of motor vehicles
  • Customers grant BMW security interest over the vehicles for “super priority” under PPSA
  • BMW used computer software to register all interests on PPSR
  • Liquidator for Civic Park successfully asserted BMW registration defective as made under A.C.N. of Corporate Trustee and not the ABN of the Trust as required by PPSR
  • BMW required to go back and fix all of its other vehicle registrations for other customers so as not to suffer the same fate as Civic

Alleasing Pty Ltd v OneSteel Manufacturing Pty Ltd

  • Alleasing leased equipment to OneSteel worth $23M and registered the arrangements on the PPSR
  • OneSteel appointed administrators and they advised Alleasing that their claim to the leased assets was ineffective as the PPSR registration was “imperfect”
  • Further investigation revealed that Alleasing had registered its interest on the PPSR using the A.B.N. of OneSteel instead of the A.C.N. as required by the Act
  • Alleasing subsequently corrected its finance documents and re-registered it’s PPSR interest using the A.C.N. and sought a declaration stating that

* There was no defect in the original registration or

* The second registration was now valid and perfected

  • The court held that the original registration was defective due to the absence of the A.C.N. for a Body Corporate, irrespective of the fact that the A.B.N. also contains the A.C.N.
  • The court also held that the second registration was too late to be effective
  • This case may be appealed, but it shows the strict interpretation of the form over function, that the courts can take in determining interests under the PPSR
  • Getting it even a little wrong could be a costly mistake


There are many instances of businesses suffering losses due to inattention to the PPSA requirements or having ineffectual registrations.

If you believe that the PPSR may be something that can have an impact on your business, or you want further information relating to the operations under this legislation, please do not hesitate to contact our team members.

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