Commonwealth Numbered Acts Commonwealth Numbered Acts1 Section 3
Omit:
(a) it has attached to collateral; and
(b) certain extra steps (possession or control of the collateral, or registration on the Register of Personal Property Securities) have been taken to protect the interest, or the interest is perfected by force of this Act.
Substitute:
(a) it has attached to collateral; and
(b) it is enforceable against third parties; and
(c) certain extra steps (possession or control of the collateral, or registration on the Register of Personal Property Securities) have been taken to protect the interest.
Certain security interests are also declared to be temporarily perfected, or perfected, under this Act.
2 Section 3
Omit:
(f) rules about the transfer and assignment of interests in collateral (Part 2.7).
Substitute:
(f) rules about the transfer of interests in collateral (Part 2.7).
3 Section 3
Omit:
Chapter 9 also deals with references to charges and fixed and floating charges in this Act and in security agreements, and provides for an independent review of the Act within 3 years after it is enacted.
Substitute:
The Act starts to apply under Part 9.3 at the registration commencement time, which is 1 February 2012 (the first day of the month that is 26 months after this Act was given the Royal Assent), or an earlier time determined by the Minister.
Chapter 9 also deals with references to charges and fixed and floating charges in this Act and in security agreements, and provides for the review of the operation of the Act within 3 years after it starts to apply.
4 Paragraph 6(2)(c)
Repeal the paragraph, substitute:
(c) the security interest is an interest of a transferor under a transfer of intangible property that consists of an account or chattel paper, and:
(i) the transferor is an Australian entity; or
(ii) the account or chattel paper is payable in Australia; or
5 At the end of subparagraph 8(1)(f)(v)
Add ", except a transfer of a right to an insurance payment or other payment as indemnity or compensation for loss of, or damage to, collateral (or proceeds of collateral)".
6 Subparagraph 8(1)(f)(vi)
Omit "an assignment", substitute "a transfer".
7 Subparagraph 8(1)(f)(vi)
Omit "the assignment", substitute "the transfer".
8 Subparagraph 8(1)(f)(vii)
Omit "an assignment of an account, if the assignee's", substitute "a transfer of an account, if the transferee's".
9 Subparagraph 8(1)(f)(viii)
Omit "an assignment", substitute "a transfer".
10 Subparagraph 8(1)(f)(x)
Repeal the subparagraph, substitute:
(x) a transfer of the beneficial interest in a monetary obligation where, after the transfer, the transferee holds the monetary obligation on trust for the transferor;
11 At the end of paragraph 8(1)(i)
Add:
Note: See also subsection (5).
12 After paragraph 8(1)(j)
Insert:
(ja) a security interest in personal property taken by a pawnbroker, if subsection (6) applies to the security interest;
(jb) an interest that a person has:
(i) as a member of a superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993 ); or
(ii) as a member of an approved deposit fund (within the meaning of the Superannuation Industry (Supervision) Act 1993 ); or
(iii) as a holder of a retirement savings account (within the meaning of the Retirement Savings Accounts Act 1997 ); or
(iv) in an account kept under the Small Superannuation Accounts Act 1995 in the name of the person; or
(v) as a holder of a superannuation annuity (within the meaning of the Income Tax Assessment Act 1997 );
(jc) a charge created by either of the following provisions:
(i) section 6 of the Commonwealth Inscribed Stock Act 1911 ;
(ii) section 5 of the Loans Redemption and Conversion Act 1921 ;
13 Subsection 8(4)
Omit "or assignment".
Note: The heading to subsection 8(4) is altered by omitting " and assignments ".
14 At the end of section 8
Add:
Water rights
(5) In paragraph (1)(i), the reference to a right in relation to the control, use or flow of water includes, but is not limited to, a reference to a right that a person has against another person to receive (or otherwise gain access to) water.
Pawnbroker security interests
(6) For the purposes of paragraph (1)(ja), this subsection applies to a security interest taken by a pawnbroker if:
(a) the pawnbroker holds a licence or is otherwise expressly authorised (for example, by registration) by a law of a State or Territory to carry on a pawnbroking business (however described in that law); and
(b) the taking of the security interest is authorised by that licence or authorisation, and is not in contravention of that law of the State or Territory; and
(c) the security interest is taken in the ordinary course of the pawnbroker's business as a pawnbroker; and
(d) at the time the security interest is taken, the market value of the payment or obligation secured by the security interest is less than or equal to:
(i) $5,000; or
(ii) if a greater amount has been prescribed by regulations made for the purposes of subsection 47(1)--that amount; and
(e) at the time the security interest is taken, the pawnbroker believes, and it is actually the case, that the market value of the personal property is less than or equal to:
(i) $5,000; or
(ii) if a greater amount has been prescribed by regulations made for the purposes of paragraph 47(2)(c)--that amount; and
(f) the personal property is not of a kind that the regulations provide may, or must, be described by serial number in a registration.
Note: Section 47 deals with taking personal, domestic or household property free of a security interest.
15 Section 10 (paragraph (b) of the definition of description )
Repeal the paragraph, substitute:
(b) in the case of a class of personal property--a description that identifies the class, including a description that identifies the class by identifying a larger class of personal property that wholly includes the class.
Example 1: A description that identifies collateral as "sheep" (a type of livestock) is sufficient to identify collateral that is sheep wool (a product of livestock, which is a class of collateral wholly included in the larger class of "sheep").
Example 2: A description that identifies collateral as "fruit" is sufficient to identify collateral that is apples.
16 Section 10 (definition of financial product )
Repeal the definition, substitute:
"financial product" :
(a) for the purposes of the definition of investment instrument in this section--has the meaning given by the Corporations Act 2001 ; and
(b) for any other purposes--means any of the following, or an interest in any of the following, other than cash:
(i) shares;
(ii) bonds;
(iii) any other financial instrument;
(iv) any other financial asset.
17 Section 10 (paragraph (a) of the definition of grantor )
Omit "owns the personal property, or has the interest in the personal property,", substitute "has the interest in the personal property".
18 Section 10 (at the end of the definition of intellectual property )
Add:
; (g) a right under or for the purposes of a law of a foreign country that corresponds to a right mentioned in any of paragraphs (a) to (f).
19 Section 10
Insert:
"intermediary" has the meaning given by section 15.
20 Section 10
Insert:
"intermediated security" has the meaning given by section 15.
21 Section 10 (definition of investment entitlement )
Repeal the definition.
22 Section 10 (definition of investment entitlement account )
Repeal the definition.
23 Section 10 (definition of investment entitlement intermediary )
Repeal the definition.
24 Section 10 (at the end of the definition of livestock )
Add:
; and (c) the products of livestock before they become proceeds (for example, the wool on a sheep's back before the sheep is shorn).
25 Section 10 (paragraph (d) of the definition of negotiable instrument )
Repeal the paragraph, substitute:
(d) any other writing that evidences a right to payment of currency, if:
(i) the writing is of a kind that, in the ordinary course of business, is transferred by delivery with any necessary endorsement or assignment; or
(ii) the writing satisfies the requirements for negotiability under the law governing negotiable instruments (including, but not limited to, instruments that are negotiable instruments within the meaning of this definition); or
26 Section 10 (at the end of the definition of new value )
Add "owed to the person providing the value".
27 Section 10
Insert:
"referred PPS matters (short for referred Personal Property Securities matters) " has the meaning given by section 245.
28 Section 10 (after paragraph (a) of the definition of registration time )
Insert:
(aa) section 333 (registration with respect to migrated data); or
29 Section 10
Insert:
"securities account" has the meaning given by section 15.
30 Section 10
Insert:
"take" has the meaning given by section 138A.
31 Section 10
Insert:
"water source" has the meaning given by section 138A.
32 Subsections 12(4) and (4A)
Repeal the subsections, substitute:
(3A) A person who owes payment or performance of an obligation to another person may take a security interest in the other person's right to require the payment or the performance of the obligation.
(4) Without limiting subsection (3A):
(a) an account debtor, in relation to an account or chattel paper, may take a security interest in the account or chattel paper; and
(b) an ADI may take a security interest in an ADI account that is kept with the ADI.
33 Subsection 13(3)
Repeal the subsection (not including the heading), substitute:
(3) This section only applies to a bailment for which the bailee provides value.
34 Section 15
Repeal the section, substitute:
15 Meaning of intermediated security and related terms
Meaning of intermediated security
(1) An intermediated security is the rights of a person in whose name an intermediary maintains a securities account.
Meaning of intermediary
(2) An intermediary is:
(a) a person (including a central securities depository) who holds an Australian financial services licence (within the meaning of the Corporations Act 2001 ) permitting the person, in the course of business or other regular activity, to maintain securities accounts:
(i) on behalf of others; or
(ii) on behalf of others as well as on the person's own behalf; or
(b) a person who operates a clearing and settlement facility under an Australian CS facility licence (within the meaning of the Corporations Act 2001 ), other than such a person prescribed by regulations made for the purposes of this paragraph; or
(c) a person (including a central securities depository) who holds a licence issued under the law of a foreign jurisdiction permitting the person, in the course of business or other regular activity, to maintain securities accounts:
(i) on behalf of others; or
(ii) on behalf of others as well as on the person's own behalf.
(3) An intermediary does not include a central bank.
(4) An intermediary (including a central securities depository) is an intermediary only while acting in the capacity of an intermediary.
(5) A person is not an intermediary merely because the person maintains a securities account on behalf of the issuer of the financial products to which the account relates.
(6) Without limiting subsection (5), a person is not an intermediary merely because the person:
(a) acts as a central securities depository, registrar or transfer agent for an issuer of a financial product; or
(b) records details of interests in financial products in the person's own books, being interests credited to securities accounts in the names of other persons for whom the person acts as manager or agent or otherwise in a purely administrative capacity.
Meaning of securities account
(7) In this Act:
"securities account" means an account to which interests in financial products may be credited or debited.
35 Subsection 19(5)
After "leased", insert "or bailed".
Note: The heading to subsection 19(5) is altered by inserting " bailed, " after " leased, ".
36 At the end of section 19
Add:
Note: A security interest may attach to crops while they are growing, and to the products of livestock, before they become proceeds of the crops or livestock (for example, wool before it is shorn). See subsections 31(4) and (5) (meaning of proceeds ) and section 84A (security interests in crops and livestock).
37 Subparagraph 20(2)(a)(ii)
Omit "specified in the writing that is", substitute ", or omission, that reasonably appears to be".
38 Paragraph 21(1)(b)
Repeal the paragraph, substitute:
(b) all of the following apply:
(i) the security interest is attached to the collateral;
(ii) the security interest is enforceable against a third party;
(iii) subsection (2) applies.
39 Subparagraph 21(2)(c)(i)
Repeal the subparagraph, substitute:
(i) an ADI account in relation to which the ADI is the secured party;
40 Paragraphs 24(5)(b) and (d)
Omit "assignee", substitute "transferee".
41 Section 26
Repeal the section, substitute:
26 Control of intermediated securities
Main rule
(1) A person has control of an intermediated security that is credited to a securities account if, and only if, this section so provides.
Control by agreement
(2) A secured party has control of an intermediated security if:
(a) one of the following conditions is satisfied:
(i) there is an agreement in force between the grantor, the secured party and the intermediary who maintains the securities account;
(ii) there is an agreement in force between the grantor and the intermediary;
(iii) there is an agreement in force between the grantor and the secured party, and notice of the agreement is given to the intermediary; and
(b) the agreement has the effect that:
(i) the intermediary must not comply with instructions given by the grantor in relation to the intermediated security without seeking the consent of the secured party (or a person who has agreed to act on the instructions of the secured party); or
(ii) the intermediary must comply, or must comply in one or more specified circumstances, with instructions (including instructions to debit the account) given by the secured party in relation to the intermediated security without seeking the consent of the grantor (or any person who has agreed to act on the instructions of the grantor).
(3) If the intermediary who maintains the securities account is an intermediary because of paragraph 15(2)(b), a reference to the intermediary in subparagraphs (2)(a)(i) to (iii) of this section includes a reference to a person prescribed by regulations made for the purposes of this subsection.
Note 1: Under paragraph 15(2)(b), a person is an intermediary if the person operates a clearing and settlement facility under an Australian CS facilities licence (within the meaning of the Corporations Act 2001 ), other than such a person prescribed by regulations made for the purposes of that paragraph.
Note 2: The regulations may prescribe a person by reference to a class or classes of persons (see subsection 33(3A) of the Acts Interpretation Act 1901 ).
Control by secured party in whose name securities account is maintained
(4) A secured party has control of an intermediated security if:
(a) the securities account is maintained in the secured party's name; or
(b) the securities account is maintained in the name of another person (who is not the grantor or debtor), and that person acknowledges in writing that he, she or it holds the intermediated security on behalf of the secured party.
42 Paragraph 32(1)(a)
Repeal the paragraph, substitute:
(a) continues in the collateral, unless:
(i) the secured party expressly or impliedly authorised a disposal giving rise to the proceeds; or
(ii) the secured party expressly or impliedly agreed that a dealing giving rise to the proceeds would extinguish the security interest; and
43 Paragraph 44(2)(b)
Repeal the paragraph, substitute:
(b) the security interest was created or provided for by a transaction to which the buyer or lessee is a party, unless the personal property concerned is of a kind prescribed by regulations for the purposes of this paragraph.
44 Subsection 44(3)
Repeal the subsection.
45 Subsection 51(2)
Repeal the subsection, substitute:
Exception
(2) Subsection (1) does not apply if, at the time the interest is taken, the transferee has actual or constructive knowledge that crediting the interest in the financial product constitutes a breach of a security agreement that provides for a security interest in any intermediated security or financial product.
Note: The heading to section 51 is altered by omitting " investment entitlement " and substituting " intermediated security ".
46 Subsection 52(1)
Omit "(other than section 322)", substitute "(or perfected by force of section 322)".
47 Subsection 52(1) (note)
Repeal the note, substitute:
Note: Section 322 provides for the perfection of transitional security interests.
48 Section 54 (before the paragraph relating to Division 3)
Insert:
For example, a security interest held by an ADI in an ADI account with the ADI has priority over any other security interest in the ADI account. An ADI has control over an ADI account held with the ADI (see section 25). Only the ADI with which an ADI account is held may perfect a security interest in the ADI account by control (see section 21). A security interest perfected by control has priority over any other security interest in the same collateral (see section 57).
49 Section 54 (paragraph relating to Division 6)
Repeal the paragraph, substitute:
Division 6 deals with priorities in relation to the following:
(a) interests that arise under law;
(b) interests of execution creditors;
(c) security interests in returned goods;
(d) security interests in accounts, financial property or intermediated securities if a foreign law governs their perfection but does not provide for public registration.
50 After subsection 57(2)
Insert:
(2A) A perfected security interest (the priority interest ) in the proceeds of original collateral has priority over any other security interest in the proceeds, except a security interest in the proceeds as original collateral that is perfected by control, if:
(a) the security interest in the first‑mentioned original collateral was perfected by control when the collateral gave rise to proceeds; and
(b) the priority interest is not perfected by control.
51 Paragraphs 62(3)(b) and 63(c) and (d)
Omit "10 business days", substitute "15 business days".
52 Subparagraph 64(1)(b)(ii)
Omit "5 business days", substitute "15 business days".
53 At the end of subsection 64(3)
Add:
; and (c) the new value is taken to be an account for the purposes of this Act (except for the purposes of this section or paragraph 12(3)(a) (account transferee's interest taken to be security interest)).
54 At the end of section 64
Add:
(4) However, if the new value mentioned in paragraph (3)(c) would be an account for the purposes of this Act in the absence of that paragraph, the paragraph does not prevent the new value from being an account for the purposes of this section or paragraph 12(3)(a).
55 Paragraph 68(2)(c)
Omit "transferee‑granted interest", substitute "collateral".
56 Paragraph 68(2)(d)
Omit:
(d) the transferee‑granted interest secures performance of an advance made, or an obligation incurred, by the transferee's secured party before:
(i) the transferor‑granted interest is re‑perfected as mentioned in paragraph (1)(d); and
(ii) the notice is given under paragraph (1)(e);
but only to the extent of the advance or obligation.
Substitute:
(d) the transferee‑granted interest secures performance of an advance made, or an obligation incurred, by the transferee's secured party before:
(i) the transferor‑granted interest is re‑perfected as mentioned in paragraph (1)(d); and
(ii) the notice is given under paragraph (1)(e);
but only to the extent of the advance or obligation.
Note: The amendment made by this item corrects a formatting error.
57 Subsection 71(1) (note)
Omit "assignment", substitute "transfer".
58 Subparagraph 72(b)(ii)
Omit "negotiable instrument", substitute "document of title".
59 Subsection 77(3)
Omit "financial property or an investment entitlement", substitute "personal property that is financial property or an intermediated security".
Note: The heading to subsection 77(3) is replaced by the heading " Security interests in financial property and intermediated securities ".
60 Subsection 77(3)
Omit "the financial property or investment entitlement", substitute "the personal property".
61 Paragraphs 77(3)(a) and (b)
Omit "property" (wherever occurring), substitute "personal property".
62 Subsection 77(4)
Omit "240(3)", substitute "240(4) or (5)".
63 Part 2.7 (heading)
Repeal the heading, substitute:
Part 2.7 -- Transfer of interests in collateral
64 Section 78
Omit:
This Part deals with the transfer and assignment of interests in collateral.
Substitute:
This Part deals with the transfer of interests in collateral.
65 Section 83
Repeal the section, substitute:
This Part includes rules on 3 topics:
(a) the relationship between a security interest in crops and interests in the land on which the crops are growing; and
(b) the capacity for a security interest to attach to crops while they are growing, and to the products of livestock, before the crops or products become proceeds (for example, the wool on a sheep's back before it is shorn); and
(c) the priority to be given to security interests in crops (and proceeds) granted to enable the crops to be produced, and security interests in livestock (and proceeds) granted to enable the livestock to be fed and developed.
Other provisions of this Act that deal with agricultural interests are subsections 31(4), (5) and (6) (meaning of proceeds of crops and livestock) and Division 6 of Part 4.3 (enforcement of security interests in crops and livestock).
66 After section 84
Insert:
Security interest in crops while they are growing
(1) To avoid doubt, a security interest may attach to crops while they are growing.
Security interest in the products of livestock
(2) To avoid doubt, a security interest may attach to the products of livestock before they become proceeds (for example, the wool on a sheep's back before the sheep is shorn).
Note 1: Livestock includes the products of livestock before they become proceeds (see section 10).
Note 2: For what are the proceeds of crops and livestock, see subsections 31(4), (5) and (6).
67 Section 85
Omit "in crops has priority over any other security interest in crops that is granted by the same grantor in the same crops", substitute "that is granted by a grantor in crops or the proceeds of crops has priority over any other security interest that is granted by the same grantor in the same crops or proceeds".
68 Section 86
Omit "livestock has priority over any other security interest (other than a purchase money security interest) that is granted by the same grantor in the same livestock", substitute "livestock or the proceeds of livestock has priority over any other security interest (other than a purchase money security interest) that is granted by the same grantor in the same livestock or proceeds".
69 At the end of section 108
Add:
; (e) rules relating to the enforcement of security interests in crops and livestock.
70 After paragraph 109(5)(b)
Insert:
(ba) section 126 (apparent possession of collateral);
71 After paragraph 115(1)(p)
Insert:
(pa) Division 6 of Part 4.3 (seizure and disposal or retention of crops and livestock), or any particular provision of that Division;
72 Subsection 115(4)
Repeal the subsection.
73 At the end of section 116
Add:
(3) Despite subsection (1), if a grantor of a security interest in property is an individual, this Chapter applies in relation to the security interest while a person is a receiver, or a receiver and manager, of the property.
74 Section 122
Omit:
If a secured party proposes to dispose of, or retain, collateral, the party must give notice to the grantor and any other secured party with a security interest in the collateral that has a higher priority.
A person may object to a proposal by a secured party to enforce a security interest by purchasing or retaining the collateral (see Division 5).
Substitute:
If a secured party proposes to dispose of, or retain, collateral, the party must give notice to the grantor and any other secured party with a security interest in the collateral that has a higher priority. A notice of disposal may be given in the approved form, while a notice of retention must be given in the approved form.
A person may object if a secured party proposes to enforce a security interest by purchasing or retaining the collateral (see Division 5).
A person exercising or discharging rights, duties and obligations arising under this Part must act honestly and in a commercially reasonable manner (see section 111).
75 At the end of subsection 126(1)
Add:
Note: This section does not apply in relation to collateral that is used predominantly for personal, domestic or household purposes (see subsection 109(5)).
76 Subsection 135(4)
Omit "may be given", substitute "must be given".
77 At the end of section 136
Add:
Extinguishment of obligation owed to the secured party
(5) If a secured party (the retaining secured party ) takes collateral under this section free of the interests referred to in subsection (2):
(a) the debt or other obligation secured by the security interest held by the retaining secured party is extinguished; but
(b) paragraph (2)(c) does not have the effect that a debt or other obligation secured by another security interest in the collateral is extinguished, if the other security interest has a lower priority than the security interest of the retaining secured party.
78 At the end of Part 4.3
Add:
Division 6 -- Seizure and disposal or retention of crops and livestock
138A Meaning of take and water source
In this Act:
"take" fish includes:
(a) catch or kill fish; and
(b) gather or collect fish; and
(c) remove fish from any rock or other matter.
Note: Livestock includes fish (see section 10).
"water source" means:
(a) a river, lake, creek or pond, tidal waters or any other land that is submerged by water (whether permanently or intermittently or whether naturally or artificially); or
(b) any part of such a river, lake, creek or pond, tidal waters or submerged land.
138B Seizure and disposal or retention of crops
(1) Without limiting section 123 (secured party may seize collateral), for the purposes of seizing collateral under that section that is crops, or the proceeds of crops, the secured party may:
(a) take possession of the crops or the proceeds; or
(b) cut, gather or harvest the crops or the proceeds.
(2) The secured party may dispose of, or retain, collateral that is crops, or the proceeds of crops, after they have been taken, cut, gathered or harvested, subject to Divisions 2, 3, 4 and 5 (seizure, disposal or retention of collateral and objections).
(3) For the purposes of exercising a power under subsection (1) or (2), or performing any related function under Division 2, 3 or 4, the secured party may enter the land on which, or the water source in which, the crops are, or were, growing.
(4) However, the secured party may exercise the power to enter land or a water source under subsection (3) for a purpose mentioned in subsection (1) or (2) only to the same extent as the grantor would be entitled to enter the land or water source for the same purpose.
138C Seizure and disposal or retention of livestock
(1) Without limiting section 123 (secured party may seize collateral), for the purposes of seizing collateral under that section that is livestock, or the proceeds of livestock, the secured party may:
(a) take possession of the livestock or proceeds wherever it is located; or
(b) slaughter the livestock wherever it is located; or
(c) take livestock that is fish; or
(d) extract products from livestock (for example, by shearing sheep to extract wool).
Note: A security interest may attach to a livestock product (for example, the wool of a sheep) as original collateral as mentioned in subsection 84A(2), or as proceeds.
(2) The secured party may dispose of, or retain, collateral that is livestock, or the proceeds of livestock, after it has been taken, slaughtered or extracted, subject to Divisions 2, 3, 4 and 5 (seizure, disposal or retention of collateral and objections).
(3) For the purposes of exercising a power under subsection (1) or (2), or performing any related function under Division 2, 3 or 4, the secured party may enter the land on which, or the water source in which, the livestock or proceeds is located.
79 At the end of section 139
Add:
A person exercising or discharging rights, duties and obligations arising under this Part must act honestly and in a commercially reasonable manner (see section 111).
80 After subsection 140(1)
Insert:
(1A) This section does not prevent the operation of another law of the Commonwealth, or a law of a State or Territory, to the extent that the law requires the amount, personal property or proceeds to be applied towards one or more obligations to persons that do not hold security interests (or any other interests) in the collateral before being applied towards any (or all) of the obligations mentioned in subsection (2).
Example: This section does not prevent the operation of section 561 of the Corporations Act 2001 , which gives priority to the satisfaction of certain unsecured obligations over the claims of a secured party holding a circulating security interest in a debtor's property.
81 Section 141
Omit ", if the grantor could take those steps", substitute "that the person whose title to the collateral is extinguished because of the disposal or retention could take".
82 At the end of subsection 151(1) (after the note)
Add:
Example 1: A person applies to register a financing statement that describes collateral as "all present and after‑acquired property" of the grantor described in the statement. It is sufficient to comply with this subsection if the applicant believes on reasonable grounds that the secured party described in the statement will take a security interest in a particular class of items of personal property held (or later acquired) by the grantor (see paragraph (b) of the definition of description in section 10).
Example 2: A person applies to register a financing statement that describes collateral as "fruit". It is sufficient to comply with this subsection if the applicant believes on reasonable grounds that the secured party described in the statement will take a security interest in apples (see paragraph (b) of the definition of description in section 10).
83 Paragraph 174(2)(c)
Repeal the paragraph, substitute:
(c) the chronological order of any of the events mentioned in paragraph (b), in relation to one or more registrations.
84 Subsection 178(3)
Omit "collateral that is consumer property.", substitute:
collateral that:
(a) at the time the security interest attached to the collateral, the grantor intended to use predominantly for personal, domestic or household purposes; or
(b) the grantor is using predominantly for personal, domestic or household purposes.
85 Paragraph 237(2)(b)
Omit "an assignment", substitute "a transfer".
86 Subsection 239(3)
Repeal the subsection (not including the heading), substitute:
(3) In relation to a security interest in intellectual property or an intellectual property licence:
(a) subject to paragraph (c), the validity of the security interest is governed by the law of the jurisdiction (other than the law relating to conflict of laws) in which the grantor is located when the security interest attaches, under that law, to the property or licence; and
(b) subject to paragraph (c), at a particular time, the perfection, and the effect of perfection or non‑perfection, of the security interest is governed by the law of the jurisdiction (other than the law relating to conflict of laws) in which the grantor is located at that time; and
(c) the following matters are governed by the law of the jurisdiction (other than the law relating to conflict of laws) by or under which the property or licence is granted, if that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest:
(i) whether a successor in title to the grantor's interest in the property or licence takes it free of a security interest;
(ii) the validity of the security interest against a transferee of the property or licence.
87 Subsections 241(1) and (2)
Omit ", other than proceeds that are an account,".
88 At the end of section 241
Add:
(4) However, this section does not apply in relation to proceeds that are an account unless the account arises from the dealing that gave rise to the proceeds.
Note: If this section does not apply in relation to proceeds that are an account, the law governing the validity and the perfection of a security interest consisting of a transfer of the account is determined by the law of the jurisdiction in which the grantor is located (see section 239 (governing laws--intangible property)).
89 Before section 242
Insert:
90 Section 242
Omit:
(a) this Act operates in any State that has referred to the Commonwealth power to enact and amend it for the purposes of paragraph 51(xxxvii) of the Constitution;
(b) this Act operates in that State and any other State, to the extent that other constitutional powers permit its operation;
Substitute:
(a) this Act operates in any State that has given the Commonwealth power to legislate accordingly for the purposes of paragraph 51(xxxvii) of the Constitution;
(b) this Act operates in any State to the extent that other constitutional powers permit its operation;
91 After section 242
Insert:
Division 2 -- Constitutional basis
92 Paragraph 243(1)(b)
Omit "in respect of matters to which this Act relates because those matters are referred to it", substitute "because of a reference or adoption".
93 Subsection 243(1) (note 1)
Repeal the note.
94 Subsection 243(1) (note 2)
Omit "Note 2", substitute "Note".
95 Subsections 244(1) and (2)
Repeal the subsections, substitute:
General meaning
(1) A State is a referring State if, for the purposes of paragraph 51(xxxvii) of the Constitution, the Parliament of the State has, before the registration commencement time:
(a) referred the matters covered by subsections (3) and (4) to the Commonwealth Parliament; or
(b) both:
(i) adopted the relevant version of this Act; and
(ii) referred the matters covered by subsection (4) to the Commonwealth Parliament.
Note 1: For registration commencement time , see section 306.
Note 2: Subsections (5), (6) and (7) deal with when a State stops being a referring State .
(2) A State is a referring State even if the State's referral law provides that:
(a) the reference to the Commonwealth of a matter covered by subsection (3) or (4) is to terminate in particular circumstances; or
(b) the adoption of the relevant version of this Act is to terminate in particular circumstances; or
(c) any or all of the State's amendment references have not commenced in relation to a particular kind (or kinds) of personal property (or so commence at or after the registration commencement time); or
(d) the reference to the Commonwealth Parliament of a matter covered by subsection (3) or (4) has effect only:
(i) if, and to the extent that, the matter is not otherwise included in the legislative powers of the Commonwealth Parliament (otherwise than by a reference under paragraph 51(xxxvii) of the Constitution); or
(ii) if and to the extent that the matter is included in the legislative powers of the Parliament of the State.
96 Subsection 244(3)
Omit "referral version", substitute "relevant version".
Note: The heading to subsection 244(3) is replaced by the heading " Reference covering the relevant version of this Act ".
97 Subsection 244(5)
Repeal the subsection, substitute:
(5) A State stops being a referring State if:
(a) in the case where the Parliament of the State has referred to the Commonwealth Parliament the matters covered by subsection (3)--that reference terminates; or
(b) in the case where the Parliament of the State has adopted the relevant version of this Act--the adoption terminates.
98 Subsections 244(6) and (7)
Omit "referring State", substitute " referring State ".
99 Subsection 244(8) (definition of initial reference )
Repeal the definition.
100 Subsection 244(8) (definition of referral law )
Omit "matters, as mentioned in subsection (1),", substitute "the matters covered by subsection (4)".
101 Subsection 244(8) (definition of referral version of this Act )
Repeal the definition.
102 Subsection 244(8) (definition of referred provisions )
Omit "referral", substitute "relevant".
103 Subsection 244(8)
Insert:
"relevant version of this Act" means:
(a) if, at the time the State's referral law was enacted, this Act had not been enacted--this Act as originally enacted; or
(b) otherwise--this Act as originally enacted, and as amended by the Personal Property Securities (Consequential Amendments) Act 2009 and the Personal Property Securities (Corporations and Other Amendments) Act 2010 .
104 At the end of Part 7.3
Add:
Division 3 -- Constitutional guarantees
252A No constitutional preference to one State over another
A provision of this Act does not apply to the extent that the operation of the provision would give, or result in the giving of, preference (within the meaning of section 99 of the Constitution) to one State or part of a State over another State or part of a State.
252B No unjust acquisition of property
(1) A provision of this Act does not apply to the extent that the operation of the provision would result in an acquisition of property from a person otherwise than on just terms.
(2) In subsection (1):
"acquisition of property" has the same meaning as in paragraph 51(xxxi) of the Constitution.
"just terms" has the same meaning as in paragraph 51(xxxi) of the Constitution.
105 Paragraph 254(2)(h) (after paragraph (c) of the note)
Insert:
(ca) section 140 (distribution of proceeds received by secured party);
106 Section 260
Repeal the section.
Note: This section is reproduced in a different form at section 252A, inserted by item 104 of this Schedule.
107 Subsection 267(1) (note 2)
Omit "section 266", substitute "sections 266 and 267".
Note: Note 2 to subsection 267(1) will be further amended to take account of the amendments of the Corporations Act 2001 in Schedule 1 to this Act when item 108 of this Schedule commences.
108 Subsection 267(1) (note 2)
Omit "sections 266 and 267", substitute "Division 2A of Part 5.7B".
Note: Division 2A of Part 5.7B of the Corporations Act 2001 is inserted by the amendments of the Corporations Act 2001 in Part 9 of Schedule 1 to this Act. This item will commence at the same time as Part 9 of Schedule 1 to this Act, which commences at the registration commencement time within the meaning of the Personal Property Securities Act 2009 .
109 Subsection 267(3) (at the end of the note)
Add "under this subsection".
110 After section 267
Insert:
267A Vesting in grantor of security interest that attaches after winding up etc.
Vesting of security interest
(1) A security interest vests in the grantor when it attaches to the collateral if:
(a) paragraph 267(1)(a) applies in relation to the grantor; and
(b) before the time (the critical time ) mentioned in paragraph 267(1)(b), the grantor enters into a security agreement with the secured party that provides for the secured party to take a security interest in collateral from the grantor; and
(c) at the critical time:
(i) the security interest has not attached to the collateral; and
(ii) there is no registration that would perfect the security interest when it attaches to the collateral; and
(d) after the critical time, the security interest attaches to the collateral; and
(e) at the time of attachment:
(i) the security interest is unperfected; or
(ii) if the security interest is perfected, it is perfected only by a registration for which the registration time is after the critical time.
Note: This section does not apply to certain security interests (see section 268).
Property acquired for new value without knowledge
(2) Subsection (1) 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 of the Corporations Act 2001 ;
(iv) the execution of a deed of company arrangement by the company.
Note: Section 296 deals with the onus of proving matters under this subsection.
111 Subsection 268(1)
Omit "Subsection 267(2) (security interests vested in grantor) does not apply", substitute "Subsection 267(2) and section 267A (security interests vested in grantor) do not apply".
112 After paragraph 268(1)(a)
Insert:
(aa) a security interest for which perfection, and the effect of perfection or non‑perfection, is governed by the law of a foreign jurisdiction at the time mentioned in paragraph 267(1)(b);
113 Subsection 269(1)
After "section 267", insert "or 267A".
114 Paragraph 269(2)(a)
Repeal the paragraph, substitute:
(a) is taken to have suffered damage immediately before the time the security interest vests in the grantor under section 267 or 267A (as the case requires); and
115 Subparagraph 269(2)(b)(ii)
Omit "day referred to in paragraph 267(1)(b)", substitute "time mentioned in paragraph 267(1)(b)".
116 Section 304
Omit:
Part 9.3 deals with the initial application of this Act. Generally speaking, the Act starts to apply at the registration commencement time , which is 26 months after the Act is given the Royal Assent, or an earlier time determined by the Minister.
Substitute:
Part 9.3 deals with the initial application of this Act. Generally speaking, the Act starts to apply at the registration commencement time, which is 1 February 2012 (the first day of the month that is 26 months after this Act was given the Royal Assent), or an earlier time determined by the Minister.
117 Section 304
Omit:
This includes rules for determining priority between these interests and the vesting and extinguishment of interests in some situations.
Substitute:
This includes rules about the attachment, perfection and priority of transitional security interests.
118 Section 307 (definition of transitional security agreement )
Repeal the definition (including the note), substitute:
"transitional security agreement" means a security agreement that is in force immediately before the registration commencement time, and that continues in force at and after that time.
119 Section 311
Repeal the section, substitute:
311 Enforceability of transitional security interests against third parties
Despite section 20, a transitional security interest is enforceable against a third party in respect of particular personal property if it would have been so enforceable under the law that applied to the enforceability of security interests immediately before the registration commencement time, and as if this Act had not been enacted (whether the security interest arises before, at or after the registration commencement time).
120 Section 313
Repeal the section, substitute:
313 Enforcement of security interests in intellectual property licences
Section 106 applies in relation to security interests in intellectual property licences only if the security interests are provided for by security agreements made at or after the registration commencement time.
121 Divisions 1 to 5 of Part 9.4
Repeal the Divisions, substitute:
This Part deals with the transitional application of this Act.
This Part applies to transitional security interests, which are security interests provided for by security agreements (transitional security agreements) in force immediately before the registration commencement time. A transitional security interest may arise before, at or after the registration commencement time.
The registration commencement time is 1 February 2012 (the first day of the month that is 26 months after this Act was given the Royal Assent), or an earlier time determined by the Minister.
Division 2 is about the attachment, perfection and priority of transitional security interests. Transitional security interests are declared to be perfected until the end of the month that is 24 months after the registration commencement time, or until they are earlier perfected by other means (for example, by registration).
Division 6 is about the migration of data about personal property from Commonwealth, State and Territory registers onto the Personal Property Securities Register. The Registrar may register migrated data about transitional security interests with effect from the registration commencement time. Such transitional security interests are known as migrated security interests.
Migrated security interests are perfected under Division 2 from immediately before the registration commencement time.
Division 7 provides for preparatory registration with respect to transitional security interests in anticipation of the commencement of the Personal Property Securities Register. Other data may also be registered under this Division before the registration commencement time.
Transitional security interests that are registered in this way are perfected under Division 2 from immediately before the registration commencement time.
Division 8 provides rules for dealing with defective registrations with respect to transitional security interests. For example, omissions arising from the migration of data onto the Personal Property Securities Register will not automatically render the registration of the data ineffective.
Division 2 -- Attachment, perfection and priority of transitional security interests
320 Guide to priority rules for transitional security interests
(1) The following table is a guide to how this Act applies to the determination of priorities involving transitional security interests:
|
Priorities involving transitional security interests |
|||
|
Item |
The following security interest: |
has priority over ... |
because of ... |
|
1 |
a perfected transitional security interest |
an unperfected security interest (whether transitional or not) |
subsection 55(3). |
|
2 |
a perfected transitional security interest |
a perfected security interest that is not a transitional security interest |
subsection 55(5) and section 322. |
|
3 |
an unperfected transitional security interest |
an unperfected security interest that is not a transitional security interest |
subsection 55(2) and section 321. |
|
4 |
a perfected security interest (whether transitional or not) |
an unperfected transitional security interest |
subsection 55(3). |
(2) Other priorities involving transitional security interests are dealt with under this Division as follows:
(a) for the priority between 2 perfected transitional security interests, see section 323;
(b) for the priority between 2 unperfected transitional security interests, see section 323;
(c) for the priority between 2 security interests, one or both of which is a transitional security interest, if the priority comes to be determined after the end of the month that is 24 months after the registration commencement time in circumstances involving insolvency or bankruptcy, see section 324.
(3) In this section, a reference to a perfected transitional security interest is taken to be a reference to a transitional security interest that has been continuously perfected, at the time the priority comes to be determined, since immediately before the registration commencement time.
For the purposes of subparagraph 21(1)(b)(i) and section 55, a transitional security interest in collateral is taken to have attached to the collateral immediately before the registration commencement time, whether the security interest arises before, at or after the registration commencement time.
Note 1: Subparagraph 21(1)(b)(i) provides that unless a security interest in collateral is perfected by force of this Act, the security interest must have attached to the collateral in order to be perfected.
Note 2: Section 55 provides for the default rules for determining priority between security interests in the same collateral. In some cases, these rules depend on when a security interest attaches. For example, the priority between 2 unperfected security interests is generally determined by their order of attachment (see subsection 55(2)).
However, 2 unperfected transitional security interests have the priority they would have had between themselves if this Act had not been enacted (see section 323).
Note 3: See section 320 for a general summary of priority rules as they affect transitional security interests.
Main rule
(1) A transitional security interest in collateral is perfected from immediately before the registration commencement time, whether the security interest arises before, at or after the registration commencement time (including a transitional security interest that arises after the end of the month that is 24 months after the registration commencement time).
Note 1: As a result of this subsection, the priority time for a transitional security interest under subsection 55(4) will be immediately before the registration commencement time, as long as the security interest remains continuously perfected.
Note 2: See section 320 for a general summary of priority rules as they affect transitional security interests.
(2) However, the transitional security interest stops being perfected under subsection (1) at the earliest of the following times:
(a) when the security interest is perfected by registration under Division 6 (migration of personal property interests);
(b) when the security interest is perfected by preparatory registration under Division 7;
(c) when a registration under Division 6 or 7 is amended so that the registration perfects the security interest;
(d) when the security interest is otherwise perfected by registration, or is perfected by possession or control;
(e) when the security interest is otherwise perfected (but not temporarily perfected) by this Act, other than under this section;
(f) the end of the month that is 24 months after the registration commencement time.
Note: In the case of a transitional security interest in collateral that does not arise until after the end of the month that is 24 months after the registration commencement time, this section has the same effect as for other transitional security interests. In particular:
(a) if a financing statement describing the collateral is registered before the end of that month, by the operation of sections 21, 55, 321 and this section, the security interest is continuously perfected from the registration time for the collateral until the registration stops being effective; and
(b) if the security interest is not perfected (otherwise than under this section) at the end of the month that is 24 months after the registration commencement time, the security interest will become unperfected at that time.
Exception
(3) Subsections (1) and (2) do not apply to a transitional security interest in collateral if the interest is of a class prescribed by regulations made for the purposes of this subsection.
323 Priority rule--priority otherwise undetermined
If the priority between 2 transitional security interests is not otherwise able to be determined under this Act, they have the priority between themselves that they would have had under the law that applied to such priority immediately before the registration commencement time, and as if this Act had not been enacted.
Note: The priority between the following transitional security interests is not otherwise able to be determined under this Act:
(a) 2 unperfected transitional security interests (because of section 321, the order of attachment between these interests cannot be determined for the purposes of subsection 55(2));
(b) 2 transitional security interests that have been continuously perfected since immediately before the registration commencement time (because of sections 321 and 322, the order of the priority times for these interests cannot be determined for the purposes of subsection 55(4)).
324 Priority rule--certain security interests upon insolvency or bankruptcy
(1) The priority between 2 security interests in the same collateral is to be determined under this Act, as if section 322 had not been enacted, if:
(a) the priority between the security interests comes to be determined after the end of the month that is 24 months after the registration commencement time; and
(b) either (or each) of the interests is a transitional security interest that has not been perfected, apart from under section 322; and
(c) the grantor or secured party in relation to either (or each) of the security interests is insolvent or bankrupt.
(2) Subsection (1) is in addition to, and does not derogate from, any other provision of this Division.
122 Paragraph 333(3)(a)
Repeal the paragraph, substitute:
(a) either:
(i) if subsection (4) applies--state the transitional registration end time as the end time for the effective registration in respect of the personal property; or
(ii) if subsection (4) does not apply--not state an end time for the effective registration in respect of the personal property; and
123 Subsection 333(4)
Repeal the subsection, substitute:
(4) This subsection applies if, in the Registrar's opinion, the registration of the interest in the personal property in the transitional register would have ended at a particular time (the transitional registration end time ) in accordance with the law under which the transitional register was maintained (as in force immediately before the migration time).
Registration time
(5) The registration time for the personal property is the registration commencement time.
Note: However, the migrated security interest in the personal property is perfected from immediately before the registration commencement time (see section 322).
124 Section 336
Repeal the section, substitute:
336 Preparatory registration--transitional security interests
Application for preparatory registration
(1) At or after the migration time, and before the registration commencement time, a person may apply to the Registrar, in the approved form, for the registration of any of the following:
(a) a financing statement that describes collateral with respect to a transitional security interest;
(b) a financing statement with respect to personal property prescribed by regulations made for the purposes of paragraph 148(c);
(c) a financing change statement to amend a financing statement mentioned in paragraph (a) or (b) that is registered under this section.
(2) The Registrar may accept an application made under subsection (1), but only if:
(a) in the case of a financing statement, or a financing change statement, with respect to a transitional security interest--the Registrar is satisfied on reasonable grounds that a transitional security interest will (whether before, at or after the registration commencement time) be:
(i) attached to the collateral; and
(ii) held by the applicant; and
(b) in any case--in the Registrar's opinion, it is operationally practicable for the Registrar to register the financing statement, or financing change statement, before the registration commencement time.
Registration
(3) If the Registrar accepts the application for registration, the Registrar may register the financing statement (or financing change statement), in accordance with the application, before the registration commencement time.
Note: The Registrar must give a verification statement to a secured party affected by the registration.
(4) A registration under this section with respect to a transitional security interest must disclose that the collateral is covered by a transitional security agreement.
(5) In the case of a registration with respect to a transitional security interest, the registration time for the collateral is the registration commencement time.
Note: However, a transitional security interest in the personal property arising under the agreement is perfected from immediately before the registration commencement time, no matter whether the security interest arises before, at or after that time (see section 322).
(6) Chapter 5 (registration) applies in relation to an application for registration under this section, and to such a registration, subject to this section.
125 Section 337
Repeal the section, substitute:
337 Registration effective despite certain defects
Scope
(1) This section applies if:
(a) a registration describes collateral covered by a transitional security agreement; and
(b) the transitional security agreement has given rise to a transitional security interest; and
(c) the registration would not, apart from this section, be effective in respect of the collateral because of a defect in the registered data (including the omission of data); and
(d) the Registrar has made a determination under subsection (2) in relation to defects of that type; and
(e) the determination applies to the registration.
Note: Sections 164 and 165 provide that serious or misleading defects in a registration, and certain particular types of defect, make a registration ineffective.
(2) For the purposes of paragraph (1)(d), the Registrar may, by legislative instrument, determine that registrations in a stated class are effective despite stated types of defect.
(3) A determination under subsection (2) may provide that the determination does not apply in relation to a stated type of defect unless the registration includes particular data in relation to the defect (or in substitution for omitted data).
Registration temporarily unaffected by the defect
(4) Despite sections 164 and 165, the defect does not make the registration ineffective for the period starting at the registration time for the collateral and ending at the following time:
(a) if the financing statement, as initially registered, states an end time--that end time (or an earlier end time, if the registration is amended to state an earlier end time);
(b) if the financing statement, as initially registered, does not state an end time--the end of the month that is 60 months after the registration commencement time (or an earlier end time, if the registration is amended to state an end time).
Registration becomes ineffective
(5) However, the registration becomes ineffective under section 164 because of the defect immediately after the end of the period mentioned in subsection (4), unless, at or before that time, the registration is amended to correct the defect.
337A Registration defective if collateral is not covered by transitional security agreement
Without limiting section 164 (defects in registration), a registration that discloses that collateral is covered by a transitional security agreement is ineffective to the extent that it describes collateral that is not covered by a transitional security agreement.
126 Subsection 340(2) (note)
Repeal the note, substitute:
Note: For the meaning of control in this subsection, see section 341.
127 At the end of subsection 340(5)
Add:
Note: For the meaning of inventory in this subsection, see section 341.
128 Before subsection 341(1)
Insert:
General rules
(1A) For the purposes of subsection 340(2), a secured party has control of personal property if:
(a) the secured party has control of the property within the ordinary meaning of the term "control"; or
(b) the secured party has control of the property within the meaning of Part 2.3 (possession and control of personal property); or
(c) in a case in which the personal property is inventory or an account--the secured party has control of the inventory or account because of:
(i) paragraph (a) or (b); or
(ii) subsection (1), (2), (3) or (4).
(1B) For the purposes of subsection 340(5) and this section:
(a) inventory has its ordinary meaning; and
(b) the definition of inventory in section 10 does not apply.
Note: The heading to section 341 is replaced by the heading " Meaning of control and inventory ".
129 Subsection 341(1)
Omit "For the purposes of determining whether inventory is a circulating asset under section 340, a secured party has control of the inventory if", substitute "For the purposes of subsection 340(2), a secured party has control of inventory if".
130 Subsection 341(2)
Omit "For the purposes of determining whether an account is a circulating asset under section 340", substitute "For the purposes of subsection 340(2)".
131 Subsection 341(2)
After "subsections (3) and (4)", insert "of this section".
132 Subsection 341(5)
Repeal the subsection.
133 Amendments to change references to investment entitlements etc. to references to intermediated securities etc.
The specified provisions of the Personal Property Securities Act 2009 listed in items 134 to 153 of this Schedule are amended by:
(a) omitting "investment entitlement intermediary" (wherever occurring) and substituting "intermediary"; and
(b) omitting "investment entitlement account" (wherever occurring) and substituting "securities account"; and
(c) omitting "investment entitlement" (wherever occurring otherwise than as mentioned in paragraph (a) or (b)) and substituting "intermediated security"; and
(d) omitting "entitlement" (wherever occurring otherwise than as mentioned in paragraphs (a), (b) and (c)) and substituting "intermediated security"; and
(e) omitting "investment entitlements" (wherever occurring) and substituting "intermediated securities".
134 Subsection 6(1A)
135 Section 10 (paragraph (e) of the definition of account )
136 Section 10 (paragraph (d) of the definition of chattel paper )
137 Section 10 (definition of goods )
138 Section 10 (paragraph (c) of the definition of intangible property )
139 Section 10 (paragraph (m) of the definition of investment instrument )
140 Section 10 (paragraph (h) of the definition of negotiable instrument )
141 Paragraph 14(2)(b)
142 Subparagraph 21(2)(c)(ii)
143 Section 23
144 Section 30
145 Subsection 31(1) (subparagraph (c)(iv) of the definition of proceeds )
146 Subsection 31(1) (paragraph (e) of the definition of proceeds )
147 Subsection 32(2)
148 Paragraphs 41(g) and (i)
149 Paragraph 42(b)
150 Section 49
Note: The heading to section 49 is altered by omitting " entitlement " and substituting " intermediated security ".
151 Subsection 51(1)
152 Subsection 77(1)
153 Paragraph 109(3)(b)
Note: The heading to subsection 109(3) is altered by omitting " investment entitlements " and substituting " intermediated securities ".