Cessation of statutory protections for migrated security interests on the PPSR
Under the Personal Property Securities Act 2009 (Cth) (the Act), securities and charges under other legislation and registers were migrated onto the Personal Property Securities Register (PPSR). Many migrated securities were not registered in accordance with the Act’s registration requirements.
Statutory protection preserved any migrated securities affected by data entry inconsistencies or deficiencies. However, these protections are due to expire at the end of this month. At that time, any migrated securities and charges reliant on statutory protection will lose their enforceability.
Secured parties need to consider these risks:
1. Migrated security interests over trust property (with trust possessing ABN)
When security over property held on trust previously identified by the trustee’s details migrated, the identifier applied was generally the ACN of the trustee.
The registration identifier for the purposes of the Personal Property Securities Regulations 2010 (Cth) (PPS Regulations) is generally the trust’s ABN (for example, where the collateral is trust property), meaning that secured parties should be ensuring that the security interest is registered over the ABN before the cessation of the statutory protections.
(Note: we recommend you register over both the ABN of the trust and ACN of the trustee).
2. Migrated registrations with either incorrect identifiers or missing grantor details
Under the PPS Regulations, the applicable identifier for a motor vehicle not held as consumer property is the grantor. However, many previous registers did not include details of the grantor, only the motor vehicle.
Accordingly, secured parties need to amend the registration to specify the grantor to ensure effective registrations once the statutory protections end.
3. Migrated security interests covering property with a serial number
The PPS Regulations require property with a serial number (whether commercial or personal property), such as a motor vehicle, to be described in the registration by their serial number. Failure to do so renders the registration void.
Many migrated security interests did not include the prescribed serial number and therefore registrations should be rectified before the cessation of the statutory protections.
(Note: due to the “taking free rules” we recommend you register over the serial number even when you are not specifically required to under the regulations).
4. Australian Securities and Investments Commission (ASIC) migrated registrations with incomplete secured party details
Company charges that migrated lacked details of all secured parties. Such registrations should be rectified to include all secured parties by creating a new secured party group with all relevant secured parties included and transferring the migrated registration to that new secured party group.
If you would like assistance in PPSR enquiries or registrations, please contact:
Rod Payne
Principal
T: 03 5226 8541
E: rpayne@ha.legal
or
Alasdair Woodford
Associate
T: 03 5225 5217
E: awoodford@ha.legal
