Contents

Chapter 1--Introduction                                                                                        2

Part 1.1--Preliminary                                                                                                           2

1............ Short title............................................................................................ 2

2............ Commencement.................................................................................. 2

3............ Guide to this Act................................................................................ 2

Part 1.2--General application of this Act                                                                  7

4............ Guide to this Part............................................................................... 7

5............ Crown to be bound............................................................................. 7

6............ Connection with Australia.................................................................. 7

7............ Application in the external Territories............................................... 8

8............ Interests to which this Act does not apply........................................ 9

Part 1.3--Definitions                                                                                                           13

Division 1--Introduction                                                                                          13

9............ Guide to this Part............................................................................. 13

Division 2--The Dictionary                                                                                     14

10.......... The Dictionary................................................................................. 14

11.......... Application of the Acts Interpretation Act 1901............................... 29

Division 3--Concepts relating to security interests and personal property       30

12.......... Meaning of security interest.............................................................. 30

13.......... Meaning of PPS lease....................................................................... 31

14.......... Meaning of purchase money security interest................................... 32

15.......... Meaning of investment entitlement and related terms....................... 35

Chapter 2--General rules relating to security interests      37

Part 2.1--Guide to this Chapter                                                                                   37

16.......... Guide to this Chapter....................................................................... 37

Part 2.2--Security interests: general principles                                                  38

17.......... Guide to this Part............................................................................. 38

18.......... General rules about security agreements and security interests....... 39

19.......... Enforceability of security interests against grantors--attachment... 39

20.......... Enforceability of security interests against third parties.................. 40

21.......... Perfection--main rule....................................................................... 42

22.......... Perfection--goods possessed by a bailee......................................... 43

Part 2.3--Possession and control of personal property                                  45

23.......... Guide to this Part............................................................................. 45

24.......... Possession........................................................................................ 46

25.......... Control of an ADI account............................................................... 47

26.......... Control of investment entitlements.................................................. 48

27.......... Control of investment instruments................................................... 49

28.......... Control of a letter of credit............................................................... 50

29.......... Control of negotiable instruments that are not evidenced by a certificate               51

Part 2.4--Attachment and perfection: specific rules                                        52

Division 1--Introduction                                                                                          52

30.......... Guide to this Part............................................................................. 52

Division 2--Proceeds and transfer                                                                      54

31.......... Meaning of proceeds........................................................................ 54

32.......... Proceeds--attachment...................................................................... 55

33.......... Proceeds--perfection and temporary perfection............................. 57

34.......... Transferred collateral--temporary perfection after transfer............ 57

Division 3--Collateral returned to grantor or debtor                               59

35.......... Returned collateral--from bailee...................................................... 59

36.......... Returned collateral--negotiable instruments and investment instruments              60

37.......... Returned collateral--following sale or lease..................................... 60

38.......... Returned collateral--accounts and chattel paper............................. 61

Division 4--Relocation of collateral or grantor to Australia etc.        63

39.......... Relocation--main rule...................................................................... 63

40.......... Relocation--intangible property and financial property................. 64

Part 2.5--Taking personal property free of security interests                   66

41.......... Guide to this Part............................................................................. 66

42.......... Application of this Part.................................................................... 67

43.......... Taking personal property free of unperfected security interest...... 67

44.......... Taking personal property free of security interest if serial number incorrect or missing        68

45.......... Taking motor vehicles free of security interest................................ 69

46.......... Taking personal property free of security interest in ordinary course of business 70

47.......... Taking personal, domestic or household property free of security interest            71

48.......... Taking currency free of security interest.......................................... 72

49.......... Taking investment interest or entitlement free of security interest in the ordinary course of trading     72

50.......... Taking investment instrument free of security interest.................... 72

51.......... Taking investment entitlement free of security interest................... 73

52.......... Taking personal property free of temporarily perfected security interest              73

53.......... Rights of secured party and transferee on taking personal property free of security interest                74

Part 2.6--Priority between security interests                                                       75

Division 1--Introduction                                                                                          75

54.......... Guide to this Part............................................................................. 75

Division 2--Priority of security interests generally                                   77

55.......... Default priority rules........................................................................ 77

56.......... How a security interest is continuously perfected........................... 78

57.......... Priority of security interests perfected by control........................... 78

58.......... Priority of advances.......................................................................... 79

59.......... Priority rules and intervening security interests............................... 79

60.......... Transfer of security interests does not affect priority..................... 79

61.......... Voluntary subordination of security interests.................................. 79

Division 3--Priority of purchase money security interests                    81

62.......... When purchase money security interests take priority over other security interests             81

63.......... Priority between competing purchase money security interests in collateral         82

64.......... Non‑purchase money security interests in accounts........................ 83

65.......... Possession of goods shipped by a common carrier.......................... 84

Division 4--Priority of security interests in transferred collateral    85

66.......... Application of this Division............................................................. 85

67.......... Priority when transferor‑granted interest has been continuously perfected            85

68.......... Priority when there is a break in the perfection of the transferor‑granted interest  86

Division 5--Priority of creditors, and purchasers of negotiable instruments, chattel paper and negotiable documents of title                                                                               88

69.......... Priority of creditor who receives payment of debt.......................... 88

70.......... Priority of person who acquires a negotiable instrument or an interest in a negotiable instrument        88

71.......... Priority of person who acquires chattel paper or an interest in chattel paper        89

72.......... Priority of holder of negotiable document of title............................ 90

Division 6--Priority of other interests                                                              91

73.......... Priority between security interests and declared statutory interests 91

74.......... Execution creditor has priority over unperfected security interest.. 92

75.......... Priority of security interests held by ADIs..................................... 93

76.......... Priority of security interests in returned goods................................ 93

77.......... Priority of certain security interests if there is no foreign register... 94

Part 2.7--Transfer and assignment of interest in collateral                         96

78.......... Guide to this Part............................................................................. 96

79.......... Transfer of collateral despite prohibition in security agreement...... 96

80.......... Rights on transfer of account or chattel paper--rights of transferee and account debtor       97

81.......... Rights on transfer of account or chattel paper--contractual restrictions and prohibitions on transfer  99

Chapter 3--Specific rules for certain security interests    101

Part 3.1--Guide to this Chapter                                                                                 101

82.......... Guide to this Chapter..................................................................... 101

Part 3.2--Agricultural interests                                                                                  102

83.......... Guide to this Part........................................................................... 102

84.......... Relationship between security interest in crops and interest in land 102

85.......... Priority of crops............................................................................. 103

86.......... Priority of livestock........................................................................ 103

Part 3.3--Accessions                                                                                                        104

87.......... Guide to this Part........................................................................... 104

88.......... Continuation of security interests in accessions............................ 104

89.......... Default rule--interest in accession has priority............................. 105

90.......... Priority interest in whole--before security interest in accession is perfected        105

91.......... Priority interest in whole--security interest in accession attaches after goods become accession         105

92.......... Secured party must not damage goods when removing accession.. 106

93.......... Reimbursement for damage caused in removing accessions............ 106

94.......... Refusal of permission to remove accession.................................... 106

95.......... Secured party must give notice of removal of accession................ 106

96.......... When person with an interest in the whole may retain accession.. 108

97.......... Court order about removal of accession......................................... 108

Part 3.4--Processed or commingled goods                                                          109

98.......... Guide to this Part........................................................................... 109

99.......... Continuation of security interests in goods that become processed or commingled               109

100........ Perfection of security interest in goods that become processed or commingled applies to product or mass          109

101........ Limit on value of priority of goods that become part of processed or commingled goods      110

102........ Priority where more than one security interest continues in processed or commingled goods               110

103........ Priority of purchase money security interest in processed or commingled goods  110

Part 3.5--Intellectual property                                                                                    112

104........ Guide to this Part........................................................................... 112

105........ Implied references to intellectual property rights.......................... 112

106........ Intellectual property licences and transfers of intellectual property 113

Chapter 4--Enforcement of security interests                            114

Part 4.1--Guide to this Chapter                                                                                 114

107........ Guide to this Chapter..................................................................... 114

Part 4.2--General rules                                                                                                   115

108........ Guide to this Part........................................................................... 115

109........ Application of this Chapter........................................................... 115

110........ Rights and remedies........................................................................ 117

111........ Rights and duties to be exercised honestly and in a commercially reasonable manner            117

112........ Rights and remedies under this Chapter......................................... 117

113........ Recovering judgment or issuing execution does not extinguish a security interest in collateral               118

114........ Rights and remedies under this Chapter are cumulative................. 118

115........ Contracting out of enforcement provisions.................................... 118

116........ Chapter does not apply to property in the hands of receivers or controllers         120

117........ Obligations secured by interests in personal property and land.... 120

118........ Enforcing security interests in accordance with land law decisions 122

119........ Relationship with consumer credit legislation................................ 124

120........ Enforcement of security interests in liquid assets--general........... 124

121........ Enforcement of security interests in liquid assets--notice to higher priority parties and grantor          125

Part 4.3--Seizure and disposal or retention of collateral                             127

Division 1--Introduction                                                                                        127

122........ Guide to this Part........................................................................... 127

Division 2--Seizing collateral                                                                               128

123........ Secured party may seize collateral................................................. 128

124........ Secured party who has perfected a security interest in collateral by possession or control   128

125........ Obligation to dispose of or retain collateral.................................... 129

126........ Apparent possession of collateral.................................................. 129

127........ Seizure by higher priority parties--notice..................................... 130

Division 3--Disposing of collateral (including by purchasing collateral)              133

128........ Secured party may dispose of collateral......................................... 133

129........ Disposal by purchase..................................................................... 134

130........ Notice of disposal of collateral....................................................... 134

131........ Duty of secured party disposing of collateral to obtain market value 136

132........ Secured party to give statement of account.................................... 136

133........ Disposing of collateral free of interests.......................................... 138

Division 4--Retaining collateral                                                                         139

134........ Proposal of secured party to retain collateral................................. 139

135........ Notice of retention of collateral...................................................... 139

136........ Retaining collateral free of interests................................................ 140

Division 5--Objection to purchase or retention                                        142

137........ Persons entitled to notice may object to proposal......................... 142

138........ Person making objection may be requested by secured party to prove interest     142

Part 4.4--Rules applying after enforcement                                                       143

139........ Guide to this Part........................................................................... 143

140........ Distribution of proceeds received by secured party...................... 143

141........ Secured party may take steps to reflect transfer of title................ 145

142........ Entitled persons may redeem collateral.......................................... 145

143........ Entitled persons may reinstate security agreement........................ 145

144........ When certain enforcement notices are not required........................ 146

Chapter 5--Personal Property Securities Register               147

Part 5.1--Guide to this Chapter                                                                                 147

145........ Guide to this Chapter..................................................................... 147

Part 5.2--Establishment of the register                                                                 148

146........ Guide to this Part........................................................................... 148

147........ Personal Property Securities Register............................................ 148

148........ What the register contains.............................................................. 149

Part 5.3--Registration                                                                                                     150

149........ Guide to this Part........................................................................... 150

150........ Registration--on application.......................................................... 150

151........ Registration--belief that collateral secures obligation.................... 151

152........ Registration--location of personal property and interested persons outside Australia         153

153........ Financing statements with respect to security interests................ 154

154........ Financing statements with respect to prescribed property............ 156

155........ Meanings of verification statement and registration event............. 157

156........ Verification statements--Registrar to give to secured parties........ 157

157........ Verification statements--secured parties to give notice to grantors 158

158........ Verification statements--publication as alternative....................... 159

Part 5.4--When a registration is effective                                                           160

159........ Guide to this Part........................................................................... 160

160........ Registration time--general.............................................................. 160

161........ Registration time--security agreements and interests.................... 161

162........ Registration time--transfers........................................................... 161

163........ Effective registration....................................................................... 161

164........ Defects in registration--general rule............................................... 162

165........ Defects in registration--particular defects..................................... 162

166........ Defects in registration--temporary effectiveness.......................... 163

167........ Security interest in certain property becomes unperfected............ 164

168........ Maintenance fees............................................................................ 165

Part 5.5--Searching the register                                                                                166

169........ Guide to this Part........................................................................... 166

170........ Search--general............................................................................... 166

171........ Search--criteria............................................................................... 167

172........ Search--by reference to details of grantor who is an individual..... 168

173........ Search--interference with privacy................................................. 172

174........ Search--written search results and evidence etc............................ 173

175........ Copy of financing statement.......................................................... 174

176........ Reports by Registrar...................................................................... 174

Part 5.6--Amendment demands                                                                                 176

Division 1--Introduction                                                                                        176

177........ Guide to this Part........................................................................... 176

178........ How amendment demands are given............................................... 176

Division 2--Amendment demands: administrative and judicial process              178

Subdivision A--Administrative process                                                             178

179........ Scope of Subdivision...................................................................... 178

180........ Administrative process--amendment notices................................ 179

181........ Administrative process--registration amendments........................ 180

Subdivision B--Judicial process                                                                          181

182........ Judicial process for considering amendment demand..................... 181

Part 5.7--Removal of data and correction of registration errors            183

183........ Guide to this Part........................................................................... 183

184........ Removal of data--general grounds................................................. 183

185........ Removal of data--registration ineffective for 7 years or more....... 184

186........ Incorrectly removed data--restoration........................................... 184

187........ Records of removed data................................................................ 185

188........ Correction of registration errors..................................................... 185

Part 5.8--Fees, administrative review and annual reports                         186

189........ Guide to this Part........................................................................... 186

190........ Registration and search fees............................................................ 186

191........ Review of decisions........................................................................ 187

192........ Annual reports................................................................................ 188

Part 5.9--Registrar of Personal Property Securities                                     189

193........ Guide to this Part........................................................................... 189

194........ Registrar--establishment of office................................................. 189

195........ Registrar--functions and powers................................................... 189

196........ Registrar--acting appointments..................................................... 190

197........ Registrar--delegation...................................................................... 190

198........ Registrar--resignation.................................................................... 191

199........ Registrar--termination................................................................... 191

200........ Deputy Registrar--establishment of office.................................... 191

201........ Deputy Registrar--functions and powers..................................... 191

202........ Deputy Registrar--resignation....................................................... 192

203........ Deputy Registrar--termination...................................................... 192

Chapter 6--Judicial proceedings                                                              193

Part 6.1--Guide to this Chapter                                                                                 193

204........ Guide to this Chapter..................................................................... 193

Part 6.2--Judicial proceedings generally                                                              194

Division 1--Introduction                                                                                        194

205........ Guide to this Part........................................................................... 194

206........ Scope of this Part........................................................................... 194

Division 2--Conferral of jurisdiction                                                                196

207........ Jurisdiction of courts...................................................................... 196

208........ Cross‑jurisdictional appeals........................................................... 196

209........ Courts to act in aid of each other.................................................... 198

Division 3--Transfers between courts                                                            199

210........ Application of this Division........................................................... 199

211........ Exercise of transfer power.............................................................. 200

212........ Criteria for transfers between courts.............................................. 201

213........ Initiating transfers between courts................................................. 202

214........ Documents and procedure.............................................................. 202

215........ Conduct of transferred proceedings................................................ 202

216........ Entitlement to practise as barrister or solicitor.............................. 203

217........ Limitation on appeals..................................................................... 203

Division 4--Registrar's role in judicial proceedings                               204

218........ Intervention in judicial proceedings................................................ 204

219........ Initiation of judicial proceedings..................................................... 204

Part 6.3--Civil penalty proceedings                                                                         205

Division 1--Introduction                                                                                        205

220........ Guide to this Part........................................................................... 205

221........ What is a civil penalty provision?.................................................. 205

Division 2--Obtaining an order for a civil penalty                                    206

222........ Federal Court may order person to pay pecuniary penalty for contravening civil penalty provision    206

223........ Contravening a civil penalty provision is not an offence............... 207

224........ Persons involved in contravening civil penalty provision.............. 207

225........ Recovery of a pecuniary penalty................................................... 207

Division 3--Civil penalty proceedings and criminal proceedings    208

226........ Civil proceedings after criminal proceedings.................................. 208

227........ Criminal proceedings during civil proceedings................................ 208

228........ Criminal proceedings after civil proceedings.................................. 208

229........ Evidence given in proceedings for penalty not admissible in criminal proceedings 208

Division 4--Enforceable undertakings relating to contraventions of civil penalty provisions  210

230........ Acceptance of undertakings relating to contraventions of civil penalty provisions                210

231........ Enforcement of undertakings.......................................................... 210

Chapter 7--Operation of laws                                                                     211

Part 7.1--Guide to this Chapter                                                                                 211

232........ Guide to this Chapter..................................................................... 211

Part 7.2--Australian laws and those of other jurisdictions                          212

233........ Guide to this Part........................................................................... 212

234........ Scope of this Part........................................................................... 212

235........ Meaning of located......................................................................... 213

236........ Commonwealth laws may provide for governing law.................... 213

237........ Express agreement.......................................................................... 214

238........ Governing laws--goods.................................................................. 214

239........ Governing laws--intangible property............................................ 215

240........ Governing laws--financial property and rights evidenced by letters of credit       216

241........ Governing laws--proceeds............................................................. 218

Part 7.3--Constitutional operation                                                                            219

242........ Guide to this Part........................................................................... 219

243........ Constitutional basis for this Act.................................................... 219

244........ Meaning of referring State.............................................................. 221

245........ Meaning of referred PPS matters................................................... 224

246........ Non‑referring State operation--overview...................................... 225

247........ Non‑referring State operation--persons........................................ 226

248........ Non‑referring State operation--activities....................................... 226

249........ Non‑referring State operation--interests....................................... 227

250........ Non‑referring State operation--inclusion of data in register.......... 228

251........ Personal property taken free of security interest when Act begins to operate       228

252........ Priority between constitutional and non‑constitutional security interests              228

Part 7.4--Relationship between Australian laws                                              229

Division 1--Introduction                                                                                        229

253........ Guide to this Part........................................................................... 229

Division 2--Concurrent operation                                                                    230

254........ Concurrent operation--general rule................................................ 230

255........ Concurrent operation--regulations may resolve inconsistency..... 231

Division 3--When other laws prevail                                                               234

256........ When other laws prevail--certain other Commonwealth Acts...... 234

257........ When other laws prevail--security agreements............................. 234

258........ When other laws prevail--personal property, security interests and matters excluded from State amendment referrals........................................................................................................ 235

259........ When other laws prevail--exclusion by referring State law or Territory law         236

260........ When other laws prevail--no constitutional preference to one State over another 237

Division 4--When this Act prevails                                                                  238

261........ When this Act prevails--registration requirements....................... 238

262........ When this Act prevails--assignment requirements........................ 239

263........ When this Act prevails--formal requirements relating to agreements 240

264........ When this Act prevails--attachment and perfection of security interests              241

Chapter 8--Miscellaneous                                                                               242

Part 8.1--Guide to this Chapter                                                                                 242

265........ Guide to this Chapter..................................................................... 242

Part 8.2--Vesting of certain unperfected security interests                      243

266........ Guide to this Part........................................................................... 243

267........ Vesting of unperfected security interests in the grantor upon the grantor's winding up or bankruptcy etc.          243

268........ Security interests unaffected by section 267.................................. 245

269........ Certain lessors, bailors and consignors entitled to damages........... 246

Part 8.3--Exercise and discharge of rights, duties and obligations       248

270........ Guide to this Part........................................................................... 248

271........ Entitlement to damages for breach of duties or obligations............ 248

272........ Liability for damages...................................................................... 248

273........ Application of Act not affected by secured party having title to collateral            249

Part 8.4--Provision of information by secured parties                                  250

274........ Guide to this Part........................................................................... 250

275........ Secured party to provide certain information relating to security interest              250

276........ Obligation to disclose successor in security interest when request made                253

277........ Time for responding to a request.................................................... 253

278........ Application to court for exemption or extension of time to respond to requests   253

279........ Persons may recover costs arising from request............................. 254

280........ Application to court for response to request etc........................... 255

281........ Application to court in relation to costs charged........................... 256

282........ Consequences of not complying with court order.......................... 257

283........ Estoppels against persons who respond to a request.................... 257

Part 8.5--Notices and timing                                                                                        259

284........ Guide to this Part........................................................................... 259

285........ Application of this Part--notices etc............................................. 259

286........ Notices--writing............................................................................ 259

287........ Notices--registered secured parties............................................... 259

288........ Notices--more than one registered secured party.......................... 260

289........ Notices etc. must be given to persons registered as secured parties using identifier               260

290........ Notices--deceased persons............................................................ 260

291........ Notices--Court orders................................................................... 261

292........ Notices--formal defects................................................................. 261

293........ Timing--applications for extension of time................................... 261

294........ Timing--references to time in this Act.......................................... 262

Part 8.6--Onus of proof and knowledge                                                                264

295........ Guide to this Part........................................................................... 264

296........ Onus of proof................................................................................. 264

297........ Meaning of constructive knowledge............................................... 265

298........ Actual or constructive knowledge by bodies corporate and other entities              266

299........ Actual or constructive knowledge in relation to certain property transfers            267

300........ Registration of data does not constitute constructive notice.......... 267

Part 8.7--Forms and regulations                                                                                268

301........ Guide to this Part........................................................................... 268

302........ Approved forms............................................................................. 268

303........ Regulations..................................................................................... 269

Chapter 9--Transitional provisions                                                        270

Part 9.1--Guide to this Chapter                                                                                 270

304........ Guide to this Chapter..................................................................... 270

Part 9.2--Key concepts                                                                                                   271

305........ Guide to this Part........................................................................... 271

306........ Meaning of migration time and registration commencement time.. 271

307........ Meaning of transitional security agreement................................... 272

308........ Meaning of transitional security interest........................................ 272

Part 9.3--Initial application of this Act                                                                   274

309........ Guide to this Part........................................................................... 274

310........ When this Act starts to apply, and in relation to which matters... 275

311........ Enforceability of transitional security interests against third parties 275

312........ Declared statutory security interests............................................. 275

313........ Enforcement of security interests in intellectual property licences 276

314........ Enforcement of security interests provided for by security agreements 276

315........ Starting time for registrations......................................................... 276

316........ Governing laws............................................................................... 276

317........ Constitutional and non‑constitutional interests............................. 276

318........ References to charges and fixed and floating charges...................... 277

Part 9.4--Transitional application of this Act                                                     278

Division 1--Introduction                                                                                        278

319........ Guide to this Part........................................................................... 278

Division 2--Priority protection for certain transitional security interests           279

320........ Scope.............................................................................................. 279

321........ Priority protected transitional security interests--attachment rule 280

322........ Priority protected transitional security interests--temporary perfection rule (non‑migrated security interests)  280

323........ Priority protected transitional security interests--perfection by registration (migrated security interests)          281

324........ Priority protected transitional security interests--priority between interests       281

325........ Priority protected transitional security interests--migrated security interests and acquisition of property         283

Division 3--Non‑protected priority for other transitional security interests     284

326........ Non‑protected priority--general rule............................................. 284

Division 4--Taking free and vesting of transitional security interests in certain situations      285

327........ Scope.............................................................................................. 285

328........ Rules about taking free and vesting................................................ 286

Division 5--Taking free and vesting of transitional security interests in other situations         287

329........ Existing rules to apply in other situations...................................... 287

Division 6--Migration of personal property interests                            288

330........ Scope of Division........................................................................... 288

331........ Requirement for Commonwealth officers etc. to provide data....... 288

332........ Meaning of migrated security interest............................................ 288

333........ Registration with respect to migrated data..................................... 289

334........ Incorrectly registered migrated data................................................ 290

335........ No requirement for notice of verification statement....................... 290

Division 7--Preparatory registration relating to transitional security interests               292

336........ Preparatory registration--transitional security interests............... 292

Division 8--Transitional security interests: registration defects     294

337........ Registration continues despite certain defects................................ 294

Part 9.5--Charges and fixed and floating charges                                           296

338........ Guide to this Part........................................................................... 296

339........ References to charges and fixed and floating charges...................... 296

340........ Meaning of circulating asset........................................................... 297

341........ Control of inventory and accounts................................................. 298

Part 9.6--Review of operation of Act                                                                      300

342........ Guide to this Part........................................................................... 300

343........ Review of operation of Act............................................................ 300

 

 

Personal Property Securities Act 2009

No. 130, 2009

 

An Act relating to personal property securities, and for related purposes

[Assented to 14 December 2009]

The Parliament of Australia enacts:

  

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