Commonwealth Numbered Acts Commonwealth Numbered Acts1 Section 9
Insert:
"circulating security interest" has the meaning given by section 51C.
2 Section 9
Insert:
"lease" does not include a lease of goods that gives rise to a PPSA security interest in the goods.
Note: An interest that arises under a lease of goods that in substance secures the payment or performance of an obligation, or that arises under a PPS lease within the meaning of the Personal Property Securities Act 2009 , may be a PPSA security interest (see sections 12 and 13 of that Act and the definition of PPSA security interest in section 51 of this Act).
3 Section 9
Insert:
"PPSA retention of title property" (short for Personal Property Security Act retention of title property) has the meaning given by section 51F.
4 Section 9
Insert:
"PPSA security interest" (short for Personal Property Security Act security interest) has the meaning given by section 51.
5 Section 9 (at the end of the definition of property )
Add:
, and:
(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.
Note: 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 (see section 51F). The sections mentioned in paragraphs (a) to (h) extend references to property of a corporation in Parts of this Act to PPSA retention of title property (or to certain PPSA retention of title property).
6 Section 9 (definition of retention of title clause )
Repeal the definition, substitute:
"retention of title clause" : property is subject to a retention of title clause under a contract for the sale of property:
(a) if the contract contains a provision the effect of which is that the seller retains title in the property until the purchase price, or another amount, has been paid in full; and
(b) if the purchase price, or the other amount, as the case may be, has not been paid in full; and
(c) to the extent that the contract does not give rise to a PPSA security interest in the property.
Note: See also the definitions of PPSA security interest in section 51 and PPSA retention of title property in section 51F.
7 Section 9
Insert:
"secured creditor" has the meaning given by section 51E.
8 Section 9
Insert:
"secured party" has the meaning given by section 51B.
9 Section 9
Insert:
"security interest" has the meaning given by section 51A.
10 After Division 6 of Part 1.2
Insert:
Division 6A -- Security interests
51 Meaning of PPSA security interest
In this Act:
"PPSA security interest" (short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 and to which that Act applies, other than a transitional security interest within the meaning of that Act.
Note 1: The Personal Property Securities Act 2009 applies to certain security interests in personal property. See the following provisions of that Act:
(a) section 8 (interests to which the Act does not apply);
(b) section 12 (meaning of security interest );
(c) Chapter 9 (transitional provisions).
Note 2: For the meaning of transitional security interest , see section 308 of the Personal Property Securities Act 2009 .
51A Meaning of security interest
In this Act:
"security interest" means:
(a) a PPSA security interest; or
(b) a charge, lien or pledge.
In this Act:
"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
In this Act:
"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.
Note: Security interests are either PPSA security interests, or charges, liens or pledges (see section 51A).
51D Meaning of possessory security interest
In this Act:
"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.
Note: Security interests are either PPSA security interests, or charges, liens or pledges (see section 51A).
51E Meaning of secured creditor
In this Act:
"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
Definition
(1) Property is PPSA retention of title property (short for Personal Property Securities Act retention of title property) of a corporation if:
(a) the property is personal property; and
(b) the property is used or occupied by, or is in the possession of, the corporation; and
(c) the corporation does not have title to the property; and
(d) a PPSA security interest is attached to the property, within the meaning of the Personal Property Securities Act 2009 ; and
(e) the corporation is the grantor in relation to the PPSA security interest, within the meaning of that Act.
Examples: The following personal property is PPSA retention of title property if a PPSA security interest attaches to the property by virtue of the transaction concerned, and the grantor is a corporation:
(a) property that is the subject of an agreement to sell subject to retention of title, or a hire purchase agreement, that secures the payment or performance of an obligation (see subsection 12(2) of the Personal Property Securities Act 2009 );
(b) property that is the subject of a lease, or a consignment agreement, that secures the payment or performance of an obligation (see subsection 12(2) of the Personal Property Securities Act 2009 );
(c) goods that are the subject of a commercial consignment (see subsection 12(3) of the Personal Property Securities Act 2009 );
(d) goods that are leased or bailed under a PPS lease (see subsection 12(3) of the Personal Property Securities Act 2009 ).
References to property of a corporation
(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.
Note: See also the definition of property in section 9.
Part 2 -- Repeal of Chapter 2K (registration of charges)
11 Section 9 (paragraphs (a) and (b) of the definition of company )
Repeal the paragraphs.
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
Repeal the paragraph.
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)
Repeal the item.
17 Subsection 168(1) (note 1)
Repeal the note.
18 Chapter 2K
Repeal the Chapter.
19 Paragraph 283DA(d)
Repeal the paragraph.
20 Section 553E
Omit "and to section 279".
21 Paragraph 601BC(6)(c)
Repeal the paragraph.
22 Subsection 601BC(6) (note)
Repeal the note.
23 Paragraphs 601BK(1)(a) and (b)
Repeal the paragraphs, substitute:
(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)
Repeal the paragraphs.
26 Section 1302
Repeal the section.
27 Section 1446
Repeal the section.
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)
Repeal the subsection, substitute:
(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)
Omit "holder of the prior charge", substitute "secured party in relation to the prior security interest".
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)
Repeal the subsection, substitute:
(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)
Repeal the heading, substitute:
Division 7 -- Rights of secured party, owner or lessor
Except as expressly provided, nothing in this Division limits the generality of anything else in it.
36 Section 441A
Repeal the section, substitute:
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
Scope
(1) This section applies if:
(a) the whole, or substantially the whole, of the property of a company under administration is subject to a security interest; and
(b) before or during the decision period, the secured party enforced the security interest in relation to all property (including any PPSA retention of title property) of the company subject to the security interest, whether or not the security interest was enforced in the same way in relation to all that property.
(2) This section also applies if:
(a) a company is under administration; and
(b) the same person is the secured party in relation to each of 2 or more security interests in property (including PPSA retention of title property) of the company; and
(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
(d) before or during the decision period, the secured party enforced the security interests in relation to all the secured property:
(i) whether or not the security interests were enforced in the same way in relation to all the secured property; and
(ii) whether or not any of the security interests was enforced in the same way in relation to all the property of the company subject to that security interest; 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.
Power of enforcement by secured party, receiver or controller
(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:
(a) the secured party;
(b) 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, and even if appointed after the decision period).
(4) Section 437D does not apply in relation to a transaction or dealing that affects property of the company and is entered into by:
(a) the secured party in the performance or exercise of a function or power as secured party; or
(b) a receiver or controller mentioned in paragraph (3)(b) of this section, in the performance or exercise of a function or power as such a receiver or controller.
37 Section 441C
Repeal the section, substitute:
441C Security interest in perishable property
Scope
(1) This section applies if perishable property of a company under administration is subject to a security interest.
Power of enforcement by secured party, receiver or controller
(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:
(a) the secured party;
(b) 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, and even if appointed after the decision period).
(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:
(a) the secured party in the performance or exercise of a function or power as secured party; or
(b) a receiver or controller mentioned in paragraph (2)(b) of this section, in the performance or exercise of a function or power as such a receiver or controller.
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
Insert:
441EA Sale of property subject to a possessory security interest
Scope
(1) This section applies if:
(a) a company is under administration; and
(b) property of the company is subject to a possessory security interest; and
(c) the property is in the possession of the secured party; and
(d) the secured party sells the property.
Distribution of proceeds of sale
(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
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
Repeal the sections.
42 Paragraphs 442D(1)(a) and (b) and (2)(a) and (b)
Repeal the paragraphs, substitute:
(a) the secured party; or
(b) a receiver or controller appointed under Part 5.2 (whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).
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)
Repeal the paragraphs, substitute:
(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".
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)
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
Repeal the section, substitute:
442B Dealing with property subject to circulating security interests
Scope
(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 1: A circulating security interest can be either a PPSA security interest to which a circulating asset has attached, or a floating charge, in the circumstances set out in section 51C.
Note 2: For the meaning of circulating asset , see section 340 of the Personal Property Securities Act 2009 .
Security interest in circulating asset
(2) Subject to sections 442C and 442D, in the case of a PPSA security interest, the administrator may deal with any of the secured property in any way the company could deal with the secured property immediately before it stopped being a circulating asset.
Floating charge
(3) Subject to sections 442C and 442D, in the case of a security interest that was a floating charge when it arose, the administrator may deal with any of the secured property as if the security interest were still a floating 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
Repeal the section, substitute:
443E Right of indemnity has priority over other debts
General rule
(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.
(3) Subsection (4) applies if:
(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)
Omit "floating charge on", substitute "circulating security interest in".
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)
Omit "chargee", substitute "secured party".
99 Subsection 588FJ(6)
Omit "charge" (first occurring), substitute "circulating security interest".
100 Subsection 588FJ(6)
Omit "chargee", substitute "secured party".
101 Subsection 588FJ(6) (definition of realisation costs )
Omit "charge", substitute "security interest".
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)
Repeal the paragraph, substitute:
(e) grant a security interest in uncalled capital;
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)
Omit "security", substitute "security interest".
107 Section 471C
Omit "security", substitute "security interest".
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)
Omit "security", substitute "security interest".
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)
Omit "security", substitute "security interest".
113 Paragraphs 554G(2)(a) and (b)
Omit "security", substitute "security interest".
114 Section 554J
Omit "security" (wherever occurring), substitute "security interest".
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)
Omit "security", substitute "security interest".
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)
Repeal the paragraph, substitute:
(a) the total amount secured by one or more security interests in the property of the company is equal to or greater than the value of the property subject to the interest (or interests); or
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)
Omit "mortgagee of", substitute "secured party in relation to".
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)
Omit "security", substitute "security interest".
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)
Omit "chargee, lienee, pledgee", substitute "secured party".
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)
Omit "lien or pledge", substitute "possessory security interest".
Note: The heading to section 442CA is altered by omitting " lien or pledge " and substituting " possessory security interest ".
133 Subsection 442CA(1)
Omit "holder of the lien or pledge", substitute "secured party".
134 Paragraph 442CA(2)(b)
Omit "lien or pledge", substitute "possessory security interest".
135 Subsection 442CB(1)
Repeal the subsection, substitute:
(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)
Omit "lien or pledge", substitute "possessory security interest".
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)
Repeal the subparagraphs, substitute:
(i) the possessory security interest; and
(ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;
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 )
Omit "chargee", substitute "secured party".
142 Section 9 (paragraph (e) of the definition of enforce )
Repeal the paragraph, substitute:
(e) exercise, in relation to property including PPSA retention of title property, as the secured party or as a receiver or person so appointed, a right, power or remedy existing because of the security interest, arising:
(i) under an agreement or instrument relating to the security interest; or
(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
(iii) under a written or unwritten law; or
(iv) in any other way.
143 Section 9 (paragraph (b) of the definition of transaction )
Repeal the paragraph, substitute:
(b) a security interest granted by the body in its property (including a security interest in the body's PPSA retention of title property); and
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)
Repeal the subparagraph, substitute:
(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
Repeal the section, substitute:
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
Repeal the section, substitute:
283CD Exceptions to guarantor's duty to inform trustee
Section 283CC does not apply in respect of:
(a) the guarantor, while:
(i) it is under external administration; or
(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
(b) a security interest in PPSA retention of title property.
148 Paragraph 411(7)(a)
Repeal the paragraph, substitute:
(a) is a secured party in relation to any property (including PPSA retention of title property) of the body; or
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)
Add:
; and (c) the third party property is not PPSA retention of title property of the corporation .
153 At the end of section 420
Add:
(5) In this section:
"lease" includes a lease of goods that gives rise to a PPSA security interest in the goods.
154 Section 435B
Insert:
"property" of a company includes any PPSA retention of title property of the company.
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
Add:
Note: A PPSA security interest in property of a company that is unperfected (within the meaning of the Personal Property Securities Act 2009 ) immediately before an administrator of the company is appointed vests in the company at the time of appointment, subject to certain exceptions (see section 267 of that Act).
156 Sections 440B to 440C
Repeal the sections, substitute:
440B Restrictions on exercise of third party property rights
General rule
(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
(b) with the leave of the Court.
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 |
||
|
Item |
If the third party is ... |
then ... |
|
1 |
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. |
|
2 |
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. |
|
3 |
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 |
the following restrictions apply: (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. |
|
4 |
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 |
the following restrictions apply: (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)
Add:
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)
Repeal the paragraph, substitute:
(c) either:
(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)
Insert:
PPSA retention of title property
(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.
Note: PPSA retention of title property does not include property that is subject to a retention of title clause (see section 9, definitions of PPSA retention of title property and retention of title clause ). Subsection (2) deals with property that is subject to a retention of title clause.
162 At the end of subsection 442CC(2)
Add:
Note: Property that is subject to a retention of title clause does not include PPSA retention of title property (see section 9, definitions of PPSA retention of title property and retention of title clause ). Subsection (1A) deals with PPSA retention of title property.
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)
Insert:
(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)
Insert:
(3A) Subsection (3) does not apply in relation to an owner or lessor of PPSA retention of title property of the company.
Note: Subsection (2) applies in relation to an owner or lessor of PPSA retention of title property of the company. Such an owner or lessor is a secured creditor of the company (see section 51F (meaning of PPSA retention of title property )).
168 Subsection 444E(4) (definition of property )
Repeal the definition, substitute:
"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)
Insert:
(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
Insert:
In this Part:
"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:
(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within time).
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
172 Subsection 474(1)
Repeal the subsection, substitute:
(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.
Note: Section 465 extends the meaning of the property of the company to include PPSA retention of title property, if the security interest in the property has vested in the company in certain situations.
173 Subsection 483(1)
After "property", insert "of the company".
174 Before Division 1 of Part 5.5
Insert:
In this Part:
"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:
(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within time).
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
175 Subsection 500(3)
After "property", insert "of the company".
176 At the end of Division 1 of Part 5.6
Add:
In this Part:
"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:
(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within time).
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
177 Subsection 568(1AA)
Repeal the subsection, substitute:
(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
Add:
(5) In this section:
"property" of a body includes PPSA retention of title property, if the security interest in the property is vested in the body because of the operation of any of the following provisions:
(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within time).
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
179 Before section 588D
Insert:
In this Part:
"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:
(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within time).
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
180 Subsection 589(5)
Insert:
"property" of a company includes any PPSA retention of title property of the company.
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
181 Before section 601AA
Insert:
In this Part:
"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:
(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within time).
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
182 Before Division 1 of Part 5B.2
Insert:
In this Part:
"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:
(a) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);
(b) section 588FL of this Act (collateral not registered within time).
Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).
Part 9 -- Special requirements for security interests
183 After Division 2 of Part 5.7B
Insert:
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 .
(4) In this Division:
"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
Scope
(1) This section applies if:
(a) any of the following events occurs:
(i) an order is made, or a resolution is passed, for the winding up of a company;
(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:
(a) at the critical time, or, if the security interest arises after the critical time, when the security interest arises:
(i) the security interest is enforceable against third parties under the law of Australia; and
(ii) the security interest is perfected by registration, and by no other means; and
(b) the registration time for the collateral is after the latest of the following times:
(i) 6 months before the critical time;
(ii) the time that is the end of 20 business days after the security agreement that gave rise to the security interest came into force, or the time that is the critical time, whichever time is earlier;
(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 .
Note 4: The Personal Property Securities Act 2009 provides for perfection by registration, possession or control, or by force of that Act (see section 21 of that Act).
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:
(i) 6 months before the critical time;
(ii) the time that is the end of 20 business days after the security agreement that gave rise to the security interest came into force, or the time that is the critical time, whichever time is earlier;
(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;
(iv) a later time ordered by the Court under section 588FM.
Note: For the meaning of critical time , see subsection (7).
Vesting of security interest in company
(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.
Note: For the meaning of critical time , see subsection (7).
Property acquired for new value without knowledge
(5) Subsection (4) does not affect the title of a person to personal property if:
(a) the person acquires the personal property for new value from a secured party, from a person on behalf of a secured party, or from a receiver in the exercise of powers:
(i) conferred by the security agreement providing for the security interest; or
(ii) implied by the general law; and
(b) at the time the person acquires the property, the person has no actual or constructive knowledge of the following (as the case requires):
(i) the filing of an application for an order to wind up the company;
(ii) the passing of a resolution to wind up the company;
(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.
(7) In this section:
"critical time" , in relation to a company, means:
(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:
(a) the failure to register the collateral earlier:
(i) was accidental or due to inadvertence or some other sufficient cause; or
(ii) is not of such a nature as to prejudice the position of creditors or shareholders; or
(b) on other grounds, it is just and equitable to grant relief.
(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
PPSA security interests arising under certain transactions
(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) a transfer of an account or chattel paper;
(b) a PPS lease, if paragraph (e) (serial numbered goods) of the definition of PPS lease in subsection 13(1) of the Personal Property Securities Act 2009 applies to the lease, and none of paragraphs (a) to (d) of that definition applies to the lease;
(c) a commercial consignment.
Example: An example of a PPSA security interest mentioned in paragraph (b) is a PPS lease of goods that does not secure the payment or performance of an obligation, if:
(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
(b) the lease is for a term of between 90 days and 1 year; and
(c) paragraphs (c) and (d) of the definition of PPS lease in subsection 13(1) of the Personal Property Securities Act 2009 do not apply to the lease.
PPSA security interests and subordinated debts
(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 );
(c) an agreement between the senior creditor and the junior creditor provides (in substance):
(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;
(d) the security interest is a security interest granted under the agreement, in the circumstances described in subparagraph (c)(iv).
Transfer of collateral subject to PPSA security interests
(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
(b) the company did not acquire the collateral free of the security interest; and
(c) the security interest became perfected before the critical time; and
(d) the security interest was continuously perfected by registration during a period covered by subsection (4) that begins before the critical time.
(4) The period covered by this subsection:
(a) begins at whichever of the following times is applicable:
(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.
Note: For what is actual or constructive knowledge, see sections 297 and 298 of the Personal Property Securities Act 2009 .
588FO Certain lessors, bailors and consignors entitled to damages
Scope
(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
General rule
(1) A security interest, and any powers purporting to be conferred by the instrument under which the security interest is created, are void, and are taken always to have been void, if:
(a) a company grants the security interest; and
(b) a person covered by subsection (2) is a secured party; and
(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).
(2) This subsection covers the following persons:
(a) a person who is an officer (including a local agent of a foreign company) of the company at the relevant time;
(b) a person who has been such an officer of the company at any time within the period of 6 months ending at the relevant time;
(c) a person associated, in relation to the creation of the security interest, with a person of a kind mentioned in paragraph (a) or (b).
(3) Without limiting paragraph (1)(c), a secured party takes a step to enforce a security interest if:
(a) the secured party appoints a receiver, or a receiver and manager, under powers conferred by an instrument creating or evidencing the security interest; or
(b) whether directly or by an agent, the secured party enters into possession or assumes control of property of a company for the purposes of enforcing the security interest; or
(c) the secured party seizes the property under section 123 of the Personal Property Securities Act 2009 for the purposes of enforcing the security interest.
Extension of time on application to the Court
(4) On application by a secured party, the Court may give leave for a security interest granted by a company to be enforced by the secured party within 6 months after the relevant time, if it is satisfied that:
(a) the company was solvent immediately before the relevant time; and
(b) in all the circumstances of the case, it is just and equitable for the Court to do so.
Exception for security interests in PPSA retention of title property
(5) This section does not apply in relation to a PPSA security interest in PPSA retention of title property.
Effect on debts, liabilities, obligations and title
(6) A debt, liability or obligation is not affected by the fact that the security interest securing the debt, liability or obligation is void under subsection (1).
(7) Subsection (1) does not affect the title of a person to property if:
(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 ):
(i) a person covered by subsection (2);
(ii) another person on behalf of a person covered by subsection (2);
(iii) a receiver, or receiver and manager, appointed under powers conferred by an instrument creating or evidencing the security interest; and
(b) at the time the person acquires the property, the person has no actual or constructive knowledge that the seller is a secured party or acting on behalf of a secured party.
(8) Sections 297 to 300 of the Personal Property Securities Act 2009 apply in relation to the determination of whether or not a person has actual or constructive knowledge as mentioned in paragraph (7)(b) of this section.
Onus of proof
(9) In a proceeding in Australia under this Act, the onus of proving the fact that a person acquires property without actual or constructive knowledge as mentioned in paragraph (7)(b) lies with the person asserting that fact.
Part 10 -- Transitional provisions
184 At the end of subsection 1483(9)
Add:
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)
Add:
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
Insert:
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
Repeal the section, substitute:
In this Part:
"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.
Note: Item 10 of Schedule 1 to the amending Act inserts the definition of security interest in section 51A.
(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
Scope
(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:
(a) the requirement to lodge or give the document or notice;
(b) the requirement for ASIC to enter or delete particulars in the Register in relation to the document or notice.
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:
(a) before the commencement time, the charge is void under subsection 266(1) or (3) (as the case requires); and
(b) either:
(i) an application is made to the Court under subsection 266(4) before the commencement time for an extension of the relevant period, and as at the commencement time, the Court had not made a decision in relation to the application; or
(ii) an application is made to the Court at or after the commencement time for an order under this subsection; and
(c) the Court is satisfied of the matters set out in subsection 266(4).
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.