Below is Justice Ashley Black’s, Supreme Court of New South Wales, foreword from The Annotated Personal Property Securities Act 2009 (Cth) – 3rd Edition.
The foreword addresses the purpose of the PPSA, emerging questions, significant Court decisions, new amendments, recent case law and the Corporations Act.
Purpose of the PPSA
The third edition of this work is a worthy successor to the earlier editions and addresses the developing body of Australian case law concerning the Personal Property Securities Act 2009 (Cth) (‘‘PPSA’’).
The Explanatory Memorandum to the Personal Property Securities Bill 2009 (Cth) ([5.1]ff) noted the benefit of a register of personal property securities that would provide greater transparency and certainty as to the status of security interests over third party property.
The purpose of the PPSA was also noted by Ward JA (with whom Bathurst CJ and Beazley P agreed) in the Court of Appeal of the Supreme Court of New South Wales in Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) (2017) 93 NSWLR 765;  NSWCA 8 at  as follows:
‘. . . the ‘mischief’ that the PPSA was intended to address was the uncertainty and complexity of the various statutory and common law regimes applicable to security interests in personal property. The legislature sought to ameliorate this by providing a new national system of registration of interests of that kind and introducing a system of default rules to determine, among other things, priorities in respect of interests in personal property’.
The avoidance of uncertainty and complexity is, of course, a desirable objective. The case law addressed in this edition nonetheless highlights the range of practical challenges that the introduction of the PPSA has posed for the systems of lenders, suppliers of goods and other parties that take security over personal property.
The authors address (in their commentary to PPSA s 8) questions that are now emerging as to whether particular forms of security (using that term broadly) such as a maritime lien, a constructive trust, a fund created under a deed of company arrangement or a creditor’s right of subrogation to a trustee’s right of indemnity can constitute a security interest within the scope of the PPSA.
Significant Court Decisions
The authors also address (in their commentary to PPSA s 12) significant Court decisions that have considered the policy underlying the PPSA and its application in a range of factual settings: see for example Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) (2017) 93 NSWLR 765;  NSWCA 8 (dealing with the concept of a fixture adopted in the PPSA) and Central Cleaning Supplies (Aust) Pty Ltd v Elkerton (2014) 98 ACSR 52;  VSC 61, rev’d (2015) 321 ALR 181; (2015) 296 FLR 25;  VSCA 92 (dealing with temporary perfection of a retention of title arrangement).
The authors also discuss (in their commentary to PPSA s 13) the amendments dealing with the concept of a ‘‘PPS Lease’’ made by the Personal Property Securities Amendment (PPS Leases) Act 2017 (Cth), which commenced on 20 May 2017, applying to contracts entered into from that date.
Recent Case Law
This edition contains a useful discussion (in the commentary to PPSA s 153, 165 and 267) of the issues that have arisen in recent case law in respect of incorrect or incomplete information in financing statements, particularly the failure to record the Australian company number of the grantor, and of the vesting provisions in s 267 of the PPSA: see for example Re OneSteel Manufacturing Pty Ltd (admins apptd) (2017) 93 NSWLR 611; (2017) 344 ALR 657; (2017) 316 FLR 402; (2017) 118 ACSR 307;  NSWSC 21.
The authors also address the Review of the Personal Property Securities Act Final Report (Whittaker review) tabled in Parliament in March 2015. These matters raise questions as to whether there is scope for simplification of aspects of the registration process, so as to reduce the risk of the numerous errors in registration that have been addressed in recent case law.
The Corporations Act
The authors’ ambitions are not limited to their comprehensive commentary as to the PPSA, and they provide a detailed and helpful commentary on provisions of the Corporations Act 2001 (Cth), including s 588FL–588FO, that interact with the PPSA. The interaction of the PPSA and the Corporations Act is of real practical significance, where much litigation involving the PPSA has arisen in the context of corporate insolvency and the vesting provisions that may apply in that context.
This edition, like earlier editions, continues to provide comprehensive references to international case law dealing with comparable Canadian and New Zealand legislation that cast light on the PPSA.
This edition has all the virtues of annotations to complex legislation, promoting a close focus upon the text and operation of the relevant sections. The authors should be congratulated on the new edition of this valuable work.
Justice Ashley Black
Supreme Court of New South Wales 5 March 2018
The Annotated Personal Property Securities Act 2009 (Cth) – 3rd Edition remains a must have ready reference for the busy legal practitioner, regulatory professionals (including insolvency practitioners), regulatory and compliance officers, students and those persons engaged in any part of secured finance.
Refer to our Corporations Law and PPSA Collection 2018 for further guidance and insights, particularly on the Corporations Act.