Commonwealth Consolidated Acts

PERSONAL PROPERTY SECURITIES ACT 2009 - SECT 14

General definition

  (1)   A purchase money security interest means any of the following:

  (a)   a security interest taken in collateral, to the extent that it secures all or part of its purchase price;

  (b)   a security interest taken in collateral by a person who gives value for the purpose of enabling the grantor to acquire rights in the collateral, to the extent that the value is applied to acquire those rights;

  (c)   the interest of a lessor or bailor of goods under a PPS lease;

  (d)   the interest of a consignor who delivers goods to a consignee under a commercial consignment.

Exceptions

  (2)   However, a purchase money security interest does not include:

  (a)   an interest acquired under a transaction of sale and lease back to the seller; or

  (b)   an interest in collateral (as original collateral) that is chattel paper, an investment instrument, an intermediated security, a monetary obligation or a negotiable instrument; or

  (c)   a security interest in collateral that (at the time the interest attaches to the collateral) the grantor intends to use predominantly for personal, domestic or household purposes.

  (2A)   Despite paragraph   (2)(c), a purchase money security interest includes an interest if:

  (a)   the interest is covered by subsection   (1); and

  (b)   the interest is in collateral that (at the time the interest attaches to the collateral) the grantor intends to use predominantly for personal, domestic or household purposes; and

  (c)   the collateral is of a kind that is required or permitted by the regulations to be described by serial number.

Mixed securities

  (3)   If a security interest in collateral secures obligations covered by subsection   (7) ( purchase money obligations ) and other obligations, the security interest is a purchase money security interest only to the extent that it secures the purchase money obligations.

  (4)   If a security interest is granted in personal property ( purchase money collateral ) that secures a purchase money obligation, together with other collateral, the security interest is a purchase money security interest only to the extent that it is granted in the purchase money collateral.

Renewal etc.

  (5)   A purchase money security interest does not lose its status as such only because the purchase money obligation is renewed, refinanced, consolidated or restructured (whether or not by the same secured party).

Application of payments to obligations

  (6)   In any transaction, if the extent to which a security interest is a purchase money security interest depends on the application of a payment to a particular obligation, the payment must be applied:

  (a)   in accordance with any method of application to which the parties agree; or

  (b)   if the parties do not agree on a method--in accordance with any intention of the debtor manifested at or before the time of the payment; or

  (c)   if neither paragraph   (a) nor (b) applies--in the following order:

  (i)   to obligations that are not secured, in the order in which those obligations were incurred;

  (ii)   to obligations that are secured, but not by purchase money security interests, in the order in which those obligations were incurred;

  (iii)   to obligations that are secured by purchase money security interests, in the order in which those obligations were incurred.

Purchase money obligations

  (7)   This subsection covers an obligation of a debtor incurred:

  (a)   as all or part of the purchase price of the collateral; or

  (b)   for value given to enable the grantor to acquire or use the collateral (provided the collateral is so acquired or used).

References to purchase price and value

  (8)   In this section, a reference to a purchase price, or value, includes a reference to credit charges and interest payable for the purchase or loan credit.