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Personal Property Securities (Commonwealth Powers) Bill 2009 This is the tabled text referred to in the Personal Property Securities (Commonwealth Powers) Bill 2009 that was tabled on 16 June 2009 in the Legislative Assembly of New South Wales by or on behalf of the Minister introducing the Bill. Russell D Grove Clerk of the Legislative Assembly of New South Wales
2008-2009 The Parliament of the Commonwealth of Australia HOUSE OF REPRESENTATIVES Presented and read a first time Personal Property Securities Bill 2009 No. , 2009 (Attorney-General) A Bill for an Act relating to personal property securities, and for related purposes
Contents Chapter 1--Introduction 1 Part 1.1--Preliminary 1 1 Short title ........................................................................................... 1 2 Commencement ................................................................................. 2 3 Guide to this Act ................................................................................ 2 Part 1.2--General application of this Act 6 4 Guide to this Part ............................................................................... 6 5 Crown to be bound............................................................................. 6 6 Connection with Australia ................................................................. 6 7 Application in the external Territories ............................................... 7 8 Interests to which this Act does not apply ......................................... 8 Part 1.3--Definitions 12 Division 1--Introduction 12 9 Guide to this Part ............................................................................. 12 Division 2--The Dictionary 13 10 The Dictionary ................................................................................. 13 11 Application of the Acts Interpretation Act 1901 .............................. 28 Division 3--Concepts relating to security interests and personal property 29 12 Meaning of security interest ............................................................ 29 13 Meaning of PPS lease ...................................................................... 30 14 Meaning of purchase money security interest ................................. 31 15 Meaning of investment entitlement and related terms ...................... 34 Chapter 2--General rules relating to security interests 36 Part 2.1--Guide to this Chapter 36 16 Guide to this Chapter ....................................................................... 36 Part 2.2--Security interests: general principles 37 17 Guide to this Part ............................................................................. 37 18 General rules about security agreements and security interests ............................................................................................ 37 19 Enforceability of security interests against grantors-- attachment ........................................................................................ 38 20 Enforceability of security interests against third parties .................. 39 21 Perfection--main rule ...................................................................... 41 i Personal Property Securities Bill 2009 No. , 2009
22 Perfection--goods possessed by a bailee......................................... 41 Part 2.3--Possession and control of personal property 43 23 Guide to this Part ............................................................................. 43 24 Possession ........................................................................................ 44 25 Control of an ADI account............................................................... 45 26 Control of investment entitlements .................................................. 46 27 Control of investment instruments ................................................... 47 28 Control of a letter of credit .............................................................. 48 29 Control of negotiable instruments that are not evidenced by a certificate ......................................................................................... 49 Part 2.4--Attachment and perfection: specific rules 50 Division 1--Introduction 50 30 Guide to this Part ............................................................................. 50 Division 2--Proceeds and transfer 52 31 Meaning of proceeds ....................................................................... 52 32 Proceeds--attachment ..................................................................... 53 33 Proceeds--perfection and temporary perfection .............................. 55 34 Transferred collateral--temporary perfection after transfer ............ 55 Division 3--Collateral returned to grantor or debtor 57 35 Returned collateral--from bailee ..................................................... 57 36 Returned collateral--negotiable instruments and investment instruments....................................................................................... 58 37 Returned collateral--following sale or lease ................................... 58 38 Returned collateral--accounts and chattel paper ............................. 59 Division 4--Relocation of collateral or grantor to Australia etc. 61 39 Relocation--main rule ..................................................................... 61 40 Relocation--intangible property and financial property.................. 62 Part 2.5--Taking personal property free of security interests 64 41 Guide to this Part ............................................................................. 64 42 Application of this Part .................................................................... 65 43 Taking personal property free of unperfected security interest........ 65 44 Taking personal property free of security interest if serial number incorrect or missing ............................................................ 65 45 Taking motor vehicles free of security interest ................................ 66 46 Taking personal property free of security interest in ordinary course of business ............................................................................ 68 47 Taking personal, domestic or household property free of security interest ................................................................................ 68 48 Taking currency free of security interest ......................................... 69 Personal Property Securities Bill 2009 No. , 2009 ii
49 Taking investment interest or entitlement free of security interest in the ordinary course of trading ......................................... 69 50 Taking investment instrument free of security interest .................... 70 51 Taking investment entitlement free of security interest ................... 70 52 Taking personal property free of temporarily perfected security interest ................................................................................ 71 53 Rights of secured party and transferee on taking personal property free of security interest ...................................................... 71 Part 2.6--Priority between security interests 73 Division 1--Introduction 73 54 Guide to this Part ............................................................................. 73 Division 2--Priority of security interests generally 75 55 Default priority rules ........................................................................ 75 56 How a security interest is continuously perfected............................ 76 57 Priority of security interests perfected by control ............................ 76 58 Priority of advances ......................................................................... 77 59 Priority rules and intervening security interests ............................... 77 60 Transfer of security interests does not affect priority ...................... 77 61 Voluntary subordination of security interests .................................. 77 Division 3--Priority of purchase money security interests 79 62 When purchase money security interests take priority over other security interests ..................................................................... 79 63 Priority between competing purchase money security interests in collateral ........................................................................ 80 64 Non-purchase money security interests in accounts ........................ 81 65 Possession of goods shipped by a common carrier .......................... 82 Division 4--Priority of security interests in transferred collateral 83 66 Application of this Division ............................................................. 83 67 Priority when transferor-granted interest has been continuously perfected ..................................................................... 83 68 Priority when there is a break in the perfection of the transferor-granted interest ................................................................ 84 Division 5--Priority of creditors, and purchasers of negotiable instruments, chattel paper and negotiable documents of title 86 69 Priority of creditor who receives payment of debt ........................... 86 70 Priority of person who acquires a negotiable instrument or an interest in a negotiable instrument ................................................... 86 71 Priority of person who acquires chattel paper or an interest in chattel paper ..................................................................................... 87 iii Personal Property Securities Bill 2009 No. , 2009
72 Priority of holder of negotiable document of title ............................ 88 Division 6--Priority of other interests 89 73 Priority between security interests and declared statutory interests ............................................................................................ 89 74 Execution creditor has priority over unperfected security interest ............................................................................................. 90 75 Priority of security interests held by ADIs....................................... 91 76 Priority of security interests in returned goods ................................ 91 77 Priority of certain security interests if there is no foreign register ............................................................................................. 92 Part 2.7--Transfer and assignment of interest in collateral 94 78 Guide to this Part ............................................................................. 94 79 Transfer of collateral despite prohibition in security agreement......................................................................................... 94 80 Rights on transfer of account or chattel paper--rights of transferee and account debtor .......................................................... 95 81 Rights on transfer of account or chattel paper--contractual restrictions and prohibitions on transfer........................................... 97 Chapter 3--Specific rules for certain security interests 98 Part 3.1--Guide to this Chapter 98 82 Guide to this Chapter ....................................................................... 98 Part 3.2--Agricultural interests 99 83 Guide to this Part ............................................................................. 99 84 Relationship between security interest in crops and interest in land .............................................................................................. 99 85 Priority of crops ............................................................................. 100 86 Priority of livestock ....................................................................... 100 Part 3.3--Accessions 101 87 Guide to this Part ........................................................................... 101 88 Continuation of security interests in accessions ............................ 101 89 Default rule--interest in accession has priority ............................. 102 90 Priority interest in whole--before security interest in accession is perfected..................................................................... 102 91 Priority interest in whole--security interest in accession attaches after goods become accession .......................................... 102 92 Secured party must not damage goods when removing accession ........................................................................................ 103 93 Reimbursement for damage caused in removing accessions ......... 103 94 Refusal of permission to remove accession ................................... 103 Personal Property Securities Bill 2009 No. , 2009 iv
95 Secured party must give notice of removal of accession ............... 103 96 When person with an interest in the whole may retain accession ........................................................................................ 105 97 Court order about removal of accession ........................................ 105 Part 3.4--Processed or commingled goods 106 98 Guide to this Part ........................................................................... 106 99 Continuation of security interests in goods that become processed or commingled .............................................................. 106 100 Perfection of security interest in goods that become processed or commingled applies to product or mass .................... 106 101 Limit on value of priority of goods that become part of processed or commingled goods .................................................... 107 102 Priority where more than one security interest continues in processed or commingled goods .................................................... 107 103 Priority of purchase money security interest in processed or commingled goods ......................................................................... 107 Part 3.5--Intellectual property 109 104 Guide to this Part ........................................................................... 109 105 Implied references to intellectual property rights .......................... 109 106 Intellectual property licences and transfers of intellectual property .......................................................................................... 110 Chapter 4--Enforcement of security interests 111 Part 4.1--Guide to this Chapter 111 107 Guide to this Chapter ..................................................................... 111 Part 4.2--General rules 112 108 Guide to this Part ........................................................................... 112 109 Application of this Chapter ............................................................ 112 110 Rights and remedies ....................................................................... 114 111 Rights and duties to be exercised honestly and in a commercially reasonable manner .................................................. 114 112 Rights and remedies under this Chapter ........................................ 114 113 Recovering judgment or issuing execution does not extinguish a security interest in collateral ...................................... 115 114 Rights and remedies under this Chapter are cumulative ................ 115 115 Contracting out of enforcement provisions .................................... 115 116 Chapter does not apply to property in the hands of receivers or controllers .................................................................................. 117 117 Obligations secured by interests in personal property and land ................................................................................................ 117 v Personal Property Securities Bill 2009 No. , 2009
118 Enforcing security interests in accordance with land law decisions ........................................................................................ 119 119 Relationship with consumer credit legislation ............................... 121 120 Enforcement of security interests in liquid assets--general .......... 121 121 Enforcement of security interests in liquid assets--notice to higher priority parties and grantor ................................................. 122 Part 4.3--Seizure and disposal or retention of collateral 124 Division 1--Introduction 124 122 Guide to this Part ........................................................................... 124 Division 2--Seizing collateral 125 123 Secured party may seize collateral ................................................. 125 124 Secured party who has perfected a security interest in collateral by possession or control ................................................. 125 125 Obligation to dispose of or retain collateral ................................... 126 126 Apparent possession of collateral .................................................. 126 127 Seizure by higher priority parties--notice ..................................... 127 Division 3--Disposing of collateral (including by purchasing collateral) 130 128 Secured party may dispose of collateral ........................................ 130 129 Disposal by purchase ..................................................................... 131 130 Notice of disposal of collateral ...................................................... 131 131 Duty of secured party disposing of collateral to obtain market value................................................................................... 133 132 Secured party to give statement of account ................................... 133 133 Disposing of collateral free of interests ......................................... 135 Division 4--Retaining collateral 136 134 Proposal of secured party to retain collateral ................................. 136 135 Notice of retention of collateral ..................................................... 136 136 Retaining collateral free of interests .............................................. 137 Division 5--Objection to purchase or retention 139 137 Persons entitled to notice may object to proposal .......................... 139 138 Person making objection may be requested by secured party to prove interest ............................................................................. 139 Part 4.4--Rules applying after enforcement 140 139 Guide to this Part ........................................................................... 140 140 Distribution of proceeds received by secured party ....................... 140 141 Secured party may take steps to reflect transfer of title ................. 142 142 Entitled persons may redeem collateral ......................................... 142 143 Entitled persons may reinstate security agreement ........................ 142 Personal Property Securities Bill 2009 No. , 2009 vi
144 When certain enforcement notices are not required ....................... 143 Chapter 5--Personal Property Securities Register 144 Part 5.1--Guide to this Chapter 144 145 Guide to this Chapter ..................................................................... 144 Part 5.2--Establishment of the register 145 146 Guide to this Part ........................................................................... 145 147 Personal Property Securities Register ............................................ 145 148 What the register contains.............................................................. 146 Part 5.3--Registration 147 149 Guide to this Part ........................................................................... 147 150 Registration--on application ......................................................... 147 151 Registration--belief that collateral secures obligation .................. 148 152 Registration--location of personal property and interested persons outside Australia ............................................................... 150 153 Financing statements with respect to security interests ................. 151 154 Financing statements with respect to prescribed property ............. 153 155 Meanings of verification statement and registration event ............ 154 156 Verification statements--Registrar to give to secured parties ....... 154 157 Verification statements--secured parties to give notice to grantors .......................................................................................... 155 158 Verification statements--publication as alternative ...................... 156 Part 5.4--When a registration is effective 157 159 Guide to this Part ........................................................................... 157 160 Registration time--general ............................................................ 157 161 Registration time--security agreements and interests ................... 158 162 Registration time--transfers .......................................................... 158 163 Effective registration...................................................................... 158 164 Defects in registration--general rule ............................................. 159 165 Defects in registration--particular defects .................................... 159 166 Defects in registration--temporary effectiveness .......................... 160 167 Security interest in certain property becomes unperfected ............ 161 168 Maintenance fees ........................................................................... 162 Part 5.5--Searching the register 163 169 Guide to this Part ........................................................................... 163 170 Search--general ............................................................................. 163 171 Search--criteria ............................................................................. 164 172 Search--by reference to details of grantor who is an individual ....................................................................................... 165 vii Personal Property Securities Bill 2009 No. , 2009
173 Search--interference with privacy ................................................ 168 174 Search--written search results and evidence etc. .......................... 169 175 Copy of financing statement .......................................................... 171 176 Reports by Registrar ...................................................................... 171 Part 5.6--Amendment demands 173 Division 1--Introduction 173 177 Guide to this Part ........................................................................... 173 178 How amendment demands are given ............................................. 173 Division 2--Amendment demands: administrative and judicial process 175 Subdivision A--Administrative process 175 179 Scope of Subdivision ..................................................................... 175 180 Administrative process--amendment notices ................................ 176 181 Administrative process--registration amendments ....................... 177 Subdivision B--Judicial process 178 182 Judicial process for considering amendment demand .................... 178 Part 5.7--Removal of data and correction of registration errors 180 183 Guide to this Part ........................................................................... 180 184 Removal of data--general grounds ............................................... 180 185 Removal of data--registration ineffective for 7 years or more ............................................................................................... 181 186 Incorrectly removed data--restoration .......................................... 181 187 Records of removed data ............................................................... 182 188 Correction of registration errors..................................................... 182 Part 5.8--Fees, administrative review and annual reports 183 189 Guide to this Part ........................................................................... 183 190 Registration and search fees........................................................... 183 191 Review of decisions ....................................................................... 184 192 Annual reports ............................................................................... 185 Part 5.9--Registrar of Personal Property Securities 186 193 Guide to this Part ........................................................................... 186 194 Registrar--establishment of office ................................................ 186 195 Registrar--functions and powers ................................................... 186 196 Registrar--acting appointments..................................................... 186 197 Registrar--delegation .................................................................... 187 198 Registrar--resignation ................................................................... 188 199 Registrar--termination .................................................................. 188 200 Deputy Registrar--establishment of office.................................... 188 Personal Property Securities Bill 2009 No. , 2009 viii
201 Deputy Registrar--functions and powers ...................................... 188 202 Deputy Registrar--resignation ...................................................... 189 203 Deputy Registrar--termination ...................................................... 189 Chapter 6--Judicial proceedings 190 Part 6.1--Guide to this Chapter 190 204 Guide to this Chapter ..................................................................... 190 Part 6.2--Judicial proceedings generally 191 Division 1--Introduction 191 205 Guide to this Part ........................................................................... 191 206 Scope of this Part ........................................................................... 191 Division 2--Conferral of jurisdiction 193 207 Jurisdiction of courts...................................................................... 193 208 Cross-jurisdictional appeals ........................................................... 193 209 Courts to act in aid of each other ................................................... 195 Division 3--Transfers between courts 196 210 Application of this Division ........................................................... 196 211 Exercise of transfer power ............................................................. 197 212 Criteria for transfers between courts .............................................. 198 213 Initiating transfers between courts ................................................. 199 214 Documents and procedure ............................................................. 199 215 Conduct of transferred proceedings ............................................... 199 216 Entitlement to practise as barrister or solicitor .............................. 200 217 Limitation on appeals..................................................................... 200 Division 4--Registrar's role in judicial proceedings 201 218 Intervention in judicial proceedings............................................... 201 219 Initiation of judicial proceedings ................................................... 201 Part 6.3--Civil penalty proceedings 202 Division 1--Introduction 202 220 Guide to this Part ........................................................................... 202 221 What is a civil penalty provision? .................................................. 202 Division 2--Obtaining an order for a civil penalty 203 222 Federal Court may order person to pay pecuniary penalty for contravening civil penalty provision .............................................. 203 223 Contravening a civil penalty provision is not an offence ............... 204 224 Persons involved in contravening civil penalty provision ............. 204 225 Recovery of a pecuniary penalty.................................................... 204 ix Personal Property Securities Bill 2009 No. , 2009
Division 3--Civil penalty proceedings and criminal proceedings 205 226 Civil proceedings after criminal proceedings ................................ 205 227 Criminal proceedings during civil proceedings ............................. 205 228 Criminal proceedings after civil proceedings ................................ 205 229 Evidence given in proceedings for penalty not admissible in criminal proceedings ...................................................................... 205 Division 4--Enforceable undertakings relating to contraventions of civil penalty provisions 207 230 Acceptance of undertakings relating to contraventions of civil penalty provisions .................................................................. 207 231 Enforcement of undertakings ......................................................... 207 Chapter 7--Operation of laws 208 Part 7.1--Guide to this Chapter 208 232 Guide to this Chapter ..................................................................... 208 Part 7.2--Australian laws and those of other jurisdictions 209 233 Guide to this Part ........................................................................... 209 234 Scope of this Part ........................................................................... 209 235 Meaning of located ........................................................................ 210 236 Commonwealth laws may provide for governing law ................... 210 237 Express agreement ......................................................................... 211 238 Governing laws--goods ................................................................ 211 239 Governing laws--intangible property............................................ 212 240 Governing laws--financial property and rights evidenced by letters of credit ............................................................................... 213 241 Governing laws--proceeds ............................................................ 215 Part 7.3--Constitutional operation 216 242 Guide to this Part ........................................................................... 216 243 Constitutional basis for this Act ..................................................... 216 244 Meaning of referring State ............................................................ 218 245 Meaning of referred PPS matters .................................................. 221 246 Non-referring State operation--overview ..................................... 222 247 Non-referring State operation--persons ........................................ 223 248 Non-referring State operation--activities ...................................... 223 249 Non-referring State operation--interests ....................................... 224 250 Non-referring State operation--inclusion of data in register ......... 225 251 Personal property taken free of security interest when Act begins to operate ............................................................................ 225 252 Priority between constitutional and non-constitutional security interests ............................................................................ 225 Personal Property Securities Bill 2009 No. , 2009 x
Part 7.4--Relationship between Australian laws 226 Division 1--Introduction 226 253 Guide to this Part ........................................................................... 226 Division 2--Concurrent operation 227 254 Concurrent operation--general rule .............................................. 227 255 Concurrent operation--regulations may resolve inconsistency.................................................................................. 228 Division 3--When other laws prevail 231 256 When other laws prevail--certain other Commonwealth Acts ...... 231 257 When other laws prevail--security agreements ............................. 231 258 When other laws prevail--personal property, security interests and matters excluded from State amendment referrals .......................................................................................... 232 259 When other laws prevail--exclusion by referring State law or Territory law .............................................................................. 233 260 When other laws prevail--no constitutional preference to one State over another.................................................................... 234 Division 4--When this Act prevails 235 261 When this Act prevails--registration requirements ....................... 235 262 When this Act prevails--assignment requirements ....................... 235 263 When this Act prevails--formal requirements relating to agreements ..................................................................................... 236 264 When this Act prevails--attachment and perfection of security interests ............................................................................ 238 Chapter 8--Miscellaneous 239 Part 8.1--Guide to this Chapter 239 265 Guide to this Chapter ..................................................................... 239 Part 8.2--Vesting of certain unperfected security interests 240 266 Guide to this Part ........................................................................... 240 267 Vesting of unperfected security interests in the grantor upon the grantor's winding up or bankruptcy etc. .................................. 240 268 Security interests unaffected by section 267 .................................. 242 269 Certain lessors, bailors and consignors entitled to damages .......... 243 Part 8.3--Exercise and discharge of rights, duties and obligations 245 270 Guide to this Part ........................................................................... 245 271 Entitlement to damages for breach of duties or obligations ........... 245 272 Liability for damages ..................................................................... 245 xi Personal Property Securities Bill 2009 No. , 2009
273 Application of Act not affected by secured party having title to collateral .................................................................................... 246 Part 8.4--Provision of information by secured parties 247 274 Guide to this Part ........................................................................... 247 275 Secured party to provide certain information relating to security interest .............................................................................. 247 276 Obligation to disclose successor in security interest when request made .................................................................................. 250 277 Time for responding to a request ................................................... 250 278 Application to court for exemption or extension of time to respond to requests ........................................................................ 250 279 Persons may recover costs arising from request ............................ 251 280 Application to court for response to request etc............................. 252 281 Application to court in relation to costs charged ........................... 252 282 Consequences of not complying with court order.......................... 254 283 Estoppels against persons who respond to a request ...................... 254 Part 8.5--Notices and timing 256 284 Guide to this Part ........................................................................... 256 285 Application of this Part--notices etc. ............................................ 256 286 Notices--writing............................................................................ 256 287 Notices--registered secured parties ............................................... 256 288 Notices--more than one registered secured party ......................... 257 289 Notices etc. must be given to persons registered as secured parties using identifier ................................................................... 257 290 Notices--deceased persons............................................................ 257 291 Notices--Court orders ................................................................... 258 292 Notices--formal defects ................................................................ 258 293 Timing--applications for extension of time .................................. 258 294 Timing--references to time in this Act.......................................... 259 Part 8.6--Onus of proof and knowledge 261 295 Guide to this Part ........................................................................... 261 296 Onus of proof ................................................................................. 261 297 Meaning of constructive knowledge .............................................. 262 298 Actual or constructive knowledge by bodies corporate and other entities................................................................................... 263 299 Actual or constructive knowledge in relation to certain property transfers ........................................................................... 264 300 Registration of data does not constitute constructive notice .......... 264 Part 8.7--Forms and regulations 265 301 Guide to this Part ........................................................................... 265 Personal Property Securities Bill 2009 No. , 2009 xii
302 Approved forms ............................................................................. 265 303 Regulations .................................................................................... 266 Chapter 9--Transitional provisions 267 Part 9.1--Guide to this Chapter 267 304 Guide to this Chapter ..................................................................... 267 Part 9.2--Key concepts 268 305 Guide to this Part ........................................................................... 268 306 Meaning of migration time and registration commencement time ................................................................................................ 268 307 Meaning of transitional security agreement .................................. 269 308 Meaning of transitional security interest ....................................... 269 Part 9.3--Initial application of this Act 271 309 Guide to this Part ........................................................................... 271 310 When this Act starts to apply, and in relation to which matters ........................................................................................... 272 311 Enforceability of transitional security interests against third parties............................................................................................. 272 312 Declared statutory security interests .............................................. 272 313 Enforcement of security interests in intellectual property licences .......................................................................................... 273 314 Enforcement of security interests provided for by security agreements ..................................................................................... 273 315 Starting time for registrations ........................................................ 273 316 Governing laws .............................................................................. 273 317 Constitutional and non-constitutional interests .............................. 273 318 References to charges and fixed and floating charges ................... 274 Part 9.4--Transitional application of this Act 275 Division 1--Introduction 275 319 Guide to this Part ........................................................................... 275 Division 2--Priority protection for certain transitional security interests 276 320 Scope ............................................................................................. 276 321 Priority protected transitional security interests--attachment rule ................................................................................................. 277 322 Priority protected transitional security interests--temporary perfection rule (non-migrated security interests) ........................... 277 323 Priority protected transitional security interests--perfection by registration (migrated security interests)................................... 278 xiii Personal Property Securities Bill 2009 No. , 2009
324 Priority protected transitional security interests--priority between interests ............................................................................ 278 325 Priority protected transitional security interests--migrated security interests and acquisition of property ................................ 280 Division 3--Non-protected priority for other transitional security interests 281 326 Non-protected priority--general rule............................................. 281 Division 4--Taking free and vesting of transitional security interests in certain situations 282 327 Scope ............................................................................................. 282 328 Rules about taking free and vesting ............................................... 283 Division 5--Taking free and vesting of transitional security interests in other situations 284 329 Existing rules to apply in other situations ...................................... 284 Division 6--Migration of personal property interests 285 330 Scope of Division .......................................................................... 285 331 Requirement for Commonwealth officers etc. to provide data ...... 285 332 Meaning of migrated security interest ........................................... 285 333 Registration with respect to migrated data ..................................... 286 334 Incorrectly registered migrated data .............................................. 287 335 No requirement for notice of verification statement ...................... 287 Division 7--Preparatory registration relating to transitional security interests 288 336 Preparatory registration--transitional security interests ................ 288 Division 8--Transitional security interests: registration defects 289 337 Registration continues despite certain defects ............................... 289 Part 9.5--Charges and fixed and floating charges 291 338 Guide to this Part ........................................................................... 291 339 References to charges and fixed and floating charges ................... 291 340 Meaning of circulating asset ......................................................... 292 341 Control of inventory and accounts ................................................. 293 Part 9.6--Review of operation of Act 295 342 Guide to this Part ........................................................................... 295 343 Review of operation of Act ............................................................ 295 Personal Property Securities Bill 2009 No. , 2009 xiv
1 A Bill for an Act relating to personal property 2 securities, and for related purposes 3 The Parliament of Australia enacts: 4 Chapter 1--Introduction 5 Part 1.1--Preliminary 6 7 1 Short title 8 This Act may be cited as the Personal Property Securities Act 9 2009. Personal Property Securities Bill 2009 No. , 2009 1
Chapter 1 Introduction Part 1.1 Preliminary Section 2 1 2 Commencement 2 This Act commences on the day after it receives the Royal Assent. 3 3 Guide to this Act 4 Overview 5 This Act is a law about security interests in personal property. 6 A security interest is an interest in personal property provided for 7 by a transaction that secures payment or the performance of an 8 obligation. The form of the transaction and the identity of the 9 person who has title to the property do not affect whether an 10 interest is a security interest. 11 Personal property includes many different kinds of tangible and 12 intangible property, other than real property. Examples include 13 motor vehicles, household goods, business inventory, intellectual 14 property and company shares. Personal property is known as 15 collateral if it is (or is anticipated to be) the subject of a security 16 interest. 17 A security interest is enforceable against a grantor when it attaches 18 to collateral. A security interest attaches to collateral when a 19 person gives value for acquiring the security interest (or does 20 something else to acquire it), and in return, the person gains rights 21 in the collateral. 22 A security interest is enforceable against third parties when it has 23 attached to the collateral and either the secured party has 24 possession or control of the collateral, or a security agreement 25 covers the collateral. 26 If a security interest in collateral is perfected, it takes priority over 27 another security interest that is unperfected when the security 28 interest comes to be enforced. A security interest is perfected if: 29 (a) it has attached to collateral; and 2 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Preliminary Part 1.1 Section 3 1 (b) certain extra steps (possession or control of the 2 collateral, or registration on the Register of 3 Personal Property Securities) have been taken to 4 protect the interest, or the interest is perfected by 5 force of this Act. 6 The secured party whose security interest has the highest priority is 7 entitled to enforce that interest ahead of secured parties with 8 security interests that have a lower priority. 9 Between perfected security interests, perfection by control has a 10 higher priority than other forms of perfection. The next level of 11 priority is given (subject to certain rules) to perfected purchase 12 money security interests. If no other way of working out priority 13 between perfected interests is provided, the highest priority is 14 given to the security interest that has been continuously perfected 15 for the longest period. 16 The Register of Personal Property Securities enables secured 17 parties to give notice of actual or prospective security interests. 18 Notice is given by the recording of data about secured parties, 19 grantors and collateral. The register may be kept electronically, for 20 example in a form that is interactive and accessible over the 21 internet. 22 Summary 23 Chapter 1 deals with some preliminary matters, including the 24 general application of the Act (Part 1.2) and its interpretation 25 (Part 1.3). 26 Chapter 2 sets out general rules relating to security interests. These 27 include the following: 28 (a) general principles relating to security agreements, 29 security interests, attachment and perfection 30 (Part 2.2); Personal Property Securities Bill 2009 No. , 2009 3
Chapter 1 Introduction Part 1.1 Preliminary Section 3 1 (b) interpretation provisions about possession and 2 control (Part 2.3); 3 (c) rules about when attachment and perfection of 4 security interests occurs in particular situations 5 (Part 2.4); 6 (d) the circumstances in which personal property is 7 taken free of a security interest in the property 8 (Part 2.5); 9 (e) how to work out the priority between competing 10 security interests (and in some cases, other sorts of 11 interests) in personal property (Part 2.6); 12 (f) rules about the transfer and assignment of interests 13 in collateral (Part 2.7). 14 Chapter 3 contains specific rules about the following: 15 (a) agricultural interests (Part 3.2); 16 (b) security interests in accessions to personal property 17 and their priority (Part 3.3); 18 (c) security interests in personal property that is 19 processed or commingled and their priority 20 (Part 3.4); 21 (d) intellectual property and intellectual property 22 licences (Part 3.5). 23 Chapter 4 deals with how to enforce a security interest in personal 24 property. Parties can contract out of some of the provisions of 25 Chapter 4. 26 Chapter 5 provides for the establishment and maintenance of a 27 register with respect to personal property securities and certain 28 prescribed personal property (the Register of Personal Property 29 Securities). 4 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Preliminary Part 1.1 Section 3 1 The Registrar of Personal Property Securities is responsible for 2 maintaining the register. Chapter 5 also deals with how the register 3 can be searched. 4 A search by reference to the details of an individual grantor must 5 be made for an authorised purpose set out in the Act. A person who 6 carries out an unauthorised search, or uses data from an 7 unauthorised search, may be liable to pay compensation or a civil 8 penalty (or both). 9 Chapter 6 deals with the role of the courts in proceedings that 10 relate to security interests in personal property. It confers 11 jurisdiction on courts and provides rules for the transfer of 12 proceedings between courts. It also describes the Registrar's role in 13 judicial proceedings and contains provisions about proceedings for 14 contravention of a civil penalty provision. 15 Chapter 7 deals with how this Act interacts with foreign laws, the 16 constitutional operation of this Act and the relationship between 17 this Act and other Australian laws. 18 Chapter 8 deals with the following: 19 (a) rules about the vesting of certain unperfected 20 interests (Part 8.2); 21 (b) rights to damages and compensation in relation to 22 contraventions of this Act (Part 8.3); 23 (c) requests to secured parties for information, how 24 notices may be given and certain other procedural 25 and administrative matters (Parts 8.4 to 8.7). 26 Chapter 9 deals with the initial application of this Act. 27 Chapter 9 also deals with references to charges and fixed and 28 floating charges in this Act and in security agreements, and 29 provides for an independent review of the Act within 3 years after 30 it is enacted. 31 Personal Property Securities Bill 2009 No. , 2009 5
Chapter 1 Introduction Part 1.2 General application of this Act Section 4 1 Part 1.2--General application of this Act 2 3 4 Guide to this Part 4 This Part contains general rules about the application of this Act. 5 These deal with the following matters: 6 (a) binding the Crown; 7 (b) geographical rules; 8 (c) particular interests to which this Act does not 9 apply. 10 5 Crown to be bound 11 This Act binds the Crown in each of its capacities. 12 6 Connection with Australia 13 (1) This Act applies to a security interest in goods or financial property 14 if: 15 (a) the location of the goods or property is in Australia; or 16 (b) the grantor is an Australian entity. 17 Note: For when personal property is located in a jurisdiction, see 18 section 235. 19 (2) This Act applies to a security interest in intangible property if: 20 (a) the grantor is an Australian entity; or 21 (b) the intangible property is an account that is payable in 22 Australia; or 23 (c) the intangible property is an assignment of an account or 24 chattel paper if: 25 (i) the assignor is an Australian entity; or 26 (ii) the account or chattel paper is payable in Australia; or 27 (d) the intangible property is an ADI account; or 6 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 General application of this Act Part 1.2 Section 7 1 (e) the intangible property is created, arises or is provided for by 2 a law of the Commonwealth, a State or a Territory. 3 Note: For the application of Australian and foreign law in relation to a 4 security interest, see Part 7.2. 5 7 Application in the external Territories 6 Extension to Norfolk Island 7 (1) This Act extends to Norfolk Island. 8 (2) A reference in this Act to "Australia" includes a reference to 9 Norfolk Island. 10 Extension to other external Territories 11 (3) This Act extends to such other external Territories (if any) as are 12 prescribed by the regulations for the purposes of this section. 13 (4) Without limiting subsection (3), if an external Territory is 14 prescribed for the purposes of this section, regulations prescribing 15 the external Territory may provide that: 16 (a) only some of the provisions of this Act apply in the external 17 Territory; and 18 (b) provisions that apply in the external Territory only apply in 19 specified circumstances. 20 (5) If: 21 (a) an external Territory is prescribed by the regulations for the 22 purposes of this section; and 23 (b) in a provision of this Act that applies (either generally or in 24 particular circumstances) in the external Territory there is a 25 reference to "Australia" or a reference to a term the definition 26 of which includes a reference to "Australia"; 27 then, unless the contrary intention appears, the reference to 28 "Australia" in that provision as so applying, or in that definition as 29 applying for the purposes of that provision as so applying, includes 30 a reference to that external Territory. Personal Property Securities Bill 2009 No. , 2009 7
Chapter 1 Introduction Part 1.2 General application of this Act Section 8 1 Acts Interpretation Act 1901 definition of Australia 2 (6) To avoid doubt, this section applies despite paragraph 17(a) of the 3 Acts Interpretation Act 1901 (definition of Australia). 4 8 Interests to which this Act does not apply 5 (1) This Act does not apply to any of the following interests (except as 6 provided by subsection (2) or (3)): 7 (a) the interest of a seller who has shipped goods to a buyer 8 under a negotiable bill of lading, or its equivalent, to the 9 order of the seller, or to the order of an agent of the seller, 10 unless the parties have otherwise evidenced an intention to 11 create or provide for a security interest in the goods; 12 (b) a lien, charge, or any other interest in personal property, that 13 is created, arises or is provided for under a law of the 14 Commonwealth (other than this Act), a State or a Territory, 15 unless the person who owns the property in which the interest 16 is granted agrees to the interest; 17 (c) a lien, charge, or any other interest in personal property, that 18 is created, arises or is provided for by operation of the 19 general law; 20 (d) any right of set-off or right of combination of accounts; 21 (e) any right or interest held by a person, or any interest provided 22 for by any transaction, under any of the following (as defined 23 in section 5 of the Payment Systems and Netting Act 1998): 24 (i) an approved netting arrangement; 25 (ii) a close-out netting contract; 26 (iii) a market netting contract; 27 (f) an interest provided for by any of the following transactions: 28 (i) the creation or transfer of an interest in land; 29 (ii) the creation of an interest in a right to payment, or the 30 creation or transfer (including a successive transfer) of a 31 right to payment, in connection with an interest in land, 32 if the writing evidencing the creation or transfer 33 specifically identifies that land; 34 (iii) a transfer (including a successive transfer) of an 35 unearned right to payment under a contract to a person 8 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 General application of this Act Part 1.2 Section 8 1 who is to perform the transferor's obligations under the 2 contract; 3 (iv) a transfer of present or future remuneration (including 4 wages, salary, commission, allowances or bonuses) 5 payable to an individual as an employee or a contractor; 6 (v) a transfer of an interest or claim in, or under, a contract 7 of annuity or policy of insurance; 8 (vi) an assignment of an account made solely to facilitate the 9 collection of the account on behalf of the person making 10 the assignment; 11 (vii) without limiting subparagraph (vi), an assignment of an 12 account, if the assignee's sole purpose in acquiring the 13 account is to collect it; 14 (viii) an assignment of an account or negotiable instrument to 15 satisfy (either wholly or partly) a pre-existing 16 indebtedness; 17 (ix) a sale of an account or chattel paper as part of a sale of 18 business, unless the seller remains in apparent control 19 (within the ordinary meaning of that term) of the 20 business after the sale; 21 (x) an assignment of the beneficial interest in an account 22 where, after the assignment, the assignee holds the 23 account on trust for the assignor; 24 (g) the following interests in property created under the 25 Bankruptcy Act 1966: 26 (i) the interest of the Official Trustee or a registered trustee 27 who has taken control (within the meaning of section 50 28 of that Act) of a debtor's or grantor's property under 29 that section; 30 (ii) the interest of the Official Trustee or a registered trustee 31 in property of a debtor or grantor that has vested in the 32 Official Trustee or the registered trustee under 33 section 58 of that Act; 34 (iii) a charge created under section 139ZN of that Act; 35 (iv) a charge created under section 139ZR of that Act; 36 (v) an interest created under a personal insolvency 37 agreement under Part X of that Act; Personal Property Securities Bill 2009 No. , 2009 9
Chapter 1 Introduction Part 1.2 General application of this Act Section 8 1 (h) a trust over some or all of an amount provided by way of 2 financial accommodation, if the person to whom the financial 3 accommodation is provided is required to use the amount in 4 accordance with a condition under which the financial 5 accommodation is provided; 6 (i) a right entitlement or authority, whether or not exclusive, that 7 is granted by or under the general law or a law of the 8 Commonwealth, a State or a Territory in relation to the 9 control, use or flow of water; 10 (j) an interest in a fixture; 11 (k) a particular right, licence or authority (the statutory right) 12 granted by or under a law of the Commonwealth, a State or a 13 Territory, if, at the time when the statutory right is granted, or 14 at any time afterwards, a provision of that law declares that 15 kind of statutory right not to be personal property for the 16 purposes of this Act (no matter whether the provision 17 remains in force); 18 Note: Personal property does not include such a statutory right if it has 19 been declared by such a law not to be personal property for the 20 purposes of this Act (see section 10). 21 (l) an interest of a kind prescribed by the regulations for the 22 purposes of this section. 23 Exceptions to subsection (1) 24 (2) The following table has effect: 25 Provisions of this Act that apply to interests mentioned in subsection (1) Item Despite subsection (1), the applies in relation to the following following provision: interest mentioned in subsection (1): 1 section 73 (a) a lien, charge or other interest in personal property of a kind described in paragraph (1)(b) or (c); and (b) an interest provided for by a transaction described in subparagraph (1)(f)(ii). 2 section 80 a right of set-off (see 10 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 General application of this Act Part 1.2 Section 8 Provisions of this Act that apply to interests mentioned in subsection (1) Item Despite subsection (1), the applies in relation to the following following provision: interest mentioned in subsection (1): paragraph (1)(d)). 3 sections 117 and 118 an interest provided for by the creation or transfer of an interest in land (see subparagraph (1)(f)(i)). 4 paragraph 140(2)(a) a lien, charge or other interest in personal property of a kind described in paragraph (1)(b) or (c). 5 paragraph 148(c) and regulations a lien, charge or other interest in made for the purposes of that personal property of a kind paragraph described in paragraph (1)(b) or (c). 1 (3) The regulations may provide that, despite subsection (1), this Act 2 applies in relation to a kind of interest prescribed by the regulations 3 for the purposes of this subsection. 4 Transfer and assignments of interests and rights 5 (4) To avoid doubt, the interest provided for by a transfer or 6 assignment of an interest or right (see paragraph (1)(f)) is the 7 interest that the transferee has to claim against the transferor. 8 Personal Property Securities Bill 2009 No. , 2009 11
Chapter 1 Introduction Part 1.3 Definitions Division 1 Introduction Section 9 1 Part 1.3--Definitions 2 Division 1--Introduction 3 9 Guide to this Part 4 This Part is about the terms that are defined in this Act. 5 Division 2 contains the Dictionary. The Dictionary is a list of every 6 term defined in this Act. A term will either be defined in the 7 Dictionary itself, or in another provision of this Act. If another 8 provision defines the term, the Dictionary will have a signpost to 9 that definition. 10 Division 3 contains some longer definitions. These include the 11 definition of security interest (in section 12). 12 A security interest is an interest in personal property provided for 13 by a transaction that secures payment or the performance of an 14 obligation. The form of the transaction and the identity of the 15 person who has title to the property do not affect whether an 16 interest is a security interest. Certain transactions that do not secure 17 payment or the performance of an obligation may also give rise to 18 a security interest: transfers of accounts, consignments and certain 19 long-term leases and bailments (called PPS leases). 20 12 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 Division 2--The Dictionary 2 10 The Dictionary 3 In this Act: 4 ABN (short for Australian Business Number) has the meaning 5 given by section 41 of the A New Tax System (Australian Business 6 Number) Act 1999. 7 accession to other goods means goods that are installed in, or 8 affixed to, the other goods, unless both the accession and the other 9 goods are required or permitted by the regulations to be described 10 by serial number. 11 account means a monetary obligation (whether or not earned by 12 performance, and, if payable in Australia, whether or not the 13 person who owes the money is located in Australia) that arises 14 from: 15 (a) disposing of property (whether by sale, transfer, assignment, 16 lease, licence or in any other way); or 17 (b) granting a right, or providing services, in the ordinary course 18 of a business of granting rights or providing services of that 19 kind (whether or not the account debtor is the person to 20 whom the right is granted or the services are provided); 21 but does not include any of the following: 22 (c) an ADI account; 23 (d) chattel paper; 24 (e) an investment entitlement; 25 (f) an investment instrument; 26 (g) a negotiable instrument. 27 Example: An account that is a credit card receivable is covered by paragraph (b). 28 account debtor means a person who is obligated under an account 29 or chattel paper. 30 ADI (short for authorised deposit-taking institution) has the same 31 meaning as in the Banking Act 1959. Personal Property Securities Bill 2009 No. , 2009 13
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 10 1 ADI account means a protected account within the meaning of the 2 Banking Act 1959. 3 advance: 4 (a) means the payment of currency, the provision of credit or the 5 giving of value; and 6 (b) includes any liability of a debtor to pay interest, credit costs 7 and other charges or costs payable by the debtor in 8 connection with the advance or the enforcement of a security 9 interest securing the advance. 10 after-acquired property means personal property acquired by the 11 grantor after a security agreement is made. 12 agency includes an authority or instrumentality. 13 amendment demand has the meaning given by section 178. 14 amendment notice has the meaning given by section 180. 15 amendment time, of a registration, has the meaning given by 16 section 160. 17 approved form has the meaning given by section 302. 18 attaches has the meaning given by section 19. 19 Australia has a meaning affected by subsection 7(4). 20 Australian entity means any of the following entities: 21 (a) an individual who is located in Australia; 22 Note: For the location of individuals, see section 235. 23 (b) a company or registrable Australian body (within the 24 meaning of the Corporations Act 2001); 25 (c) a corporation sole established under a law of the 26 Commonwealth, a State or a Territory; 27 (d) a public authority or an agency or instrumentality of the 28 Crown in right of the Commonwealth, a State or a Territory. 29 bankruptcy has the same meaning as in paragraph 51(xvii) of the 30 Constitution. 14 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 Note: Other parts of speech and grammatical forms of "bankruptcy" (for 2 example, "bankrupt") have a corresponding meaning (see section 18A 3 of the Acts Interpretation Act 1901). 4 business day means a day other than: 5 (a) a Saturday or a Sunday; or 6 (b) a day which is a public holiday for the whole of: 7 (i) any State; or 8 (ii) the Australian Capital Territory; or 9 (iii) the Northern Territory; or 10 (c) a day that falls between Christmas Day and New Year's Day; 11 or 12 (d) a day on which the Registrar has refused access to the 13 register, or otherwise suspended the operation of the register, 14 in whole or in part (see subsection 147(5)); or 15 (e) a day that is prescribed by the regulations for the purposes of 16 this definition. 17 carrying on an enterprise has the meaning given by section 41 of 18 the A New Tax System (Australian Business Number) Act 1999. 19 chattel paper means one or more writings that evidence a monetary 20 obligation and either or both of the following: 21 (a) a security interest in, or lease of, specific goods, or specific 22 goods and accessions to the specific goods (even if the 23 description of the goods (and accessions) is taken to include a 24 description of intellectual property, or an intellectual property 25 licence, under section 105); 26 (b) a security interest in specific intellectual property or a 27 specific intellectual property licence; 28 but does not include any of the following: 29 (c) a document of title; 30 (d) an investment entitlement; 31 (e) an investment instrument; 32 (f) a negotiable instrument. 33 circulating asset has the meaning given by section 340. 34 civil penalty provision has the meaning given by section 221. Personal Property Securities Bill 2009 No. , 2009 15
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 10 1 clearing and settlement facility has the meaning given by 2 Chapter 7 of the Corporations Act 2001. 3 collateral: 4 (a) means personal property to which a security interest is 5 attached; and 6 (b) in relation to a registration with respect to a security 7 interest--includes personal property described by the 8 registration (whether or not a security interest is attached to 9 the property). 10 Note: Section 161 authorises the registration of a financing statement 11 that describes personal property before or after a security 12 agreement is made covering the property, or a security interest 13 has attached to the property. 14 commercial consignment means a consignment if: 15 (a) the consignor retains an interest in goods that the consignor 16 delivers to the consignee; and 17 (b) the consignor delivers the goods to the consignee for the 18 purpose of sale, lease or other disposal; and 19 (c) the consignor and the consignee both deal in goods of that 20 kind in the ordinary course of business; 21 but does not include an agreement under which goods are delivered 22 to: 23 (d) an auctioneer for the purpose of sale; or 24 (e) a consignee for sale, lease or other disposal if the consignee 25 is generally known to the creditors of the consignee to be 26 selling or leasing goods of others. 27 commercial property means personal property other than consumer 28 property. 29 commingled: goods that are commingled include goods that are 30 mixed with goods of the same kind. 31 company means: 32 (a) a company registered under Part 2A.2 or Part 5B.1 of the 33 Corporations Act 2001; or 34 (b) a registrable body (within the meaning of that Act) that is 35 registered under Division 1 or 2 of Part 5B.2 of that Act. 16 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 constitutional corporation means a corporation to which 2 paragraph 51(xx) of the Constitution applies. 3 constructive knowledge has the meaning given by section 297. 4 Note: Section 298 deals with knowledge in relation to bodies corporate and 5 other entities. 6 consumer property means personal property held by an individual, 7 other than personal property held in the course or furtherance, to 8 any degree, of carrying on an enterprise to which an ABN has been 9 allocated. 10 continuously perfected has the meaning given by section 56. 11 control has the meaning given by Part 2.3. 12 Note: Control has an extended meaning in section 341 (control of inventory 13 and accounts in relation to fixed and floating charges). 14 crops means crops (whether matured or not and whether naturally 15 grown or planted) that have not been harvested, including: 16 (a) the products of agriculture or aquaculture, if the products 17 have not been harvested; and 18 (b) trees (but only if they are personal property), if the trees have 19 not been harvested. 20 currency means currency authorised as a medium of exchange by 21 the law of Australia or of any other country. 22 debtor means: 23 (a) a person who owes payment or performance of an obligation 24 that is secured by a security interest in personal property 25 (whether or not the person is also the grantor of the security 26 interest); or 27 (b) a transferee of, or successor to, an obligation mentioned in 28 paragraph (a). 29 defect, in relation to a registration, includes an irregularity, 30 omission or error in the registration. 31 Deputy Registrar means a Deputy Registrar of Personal Property 32 Securities. 33 Note: See Part 5.9 for the office of Deputy Registrar. Personal Property Securities Bill 2009 No. , 2009 17
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 10 1 description of personal property (including collateral and 2 proceeds) means: 3 (a) in the case of a particular item of personal property--a 4 description that identifies the item, or that identifies a class to 5 which the item belongs; or 6 (b) in the case of a class of personal property--a description that 7 identifies the class. 8 document of title means a writing issued by or addressed to a 9 bailee: 10 (a) that covers goods in the bailee's possession that are identified 11 or are fungible portions of an identified mass; and 12 (b) in which it is stated that the goods identified in it will be 13 delivered: 14 (i) to a named person, or to the transferee of that person; or 15 (ii) to the bearer; or 16 (iii) to the order of a named person. 17 effective: a registration is effective with respect to particular 18 collateral if it is effective with respect to that collateral under 19 Part 5.4. 20 enterprise has the meaning given by section 9-20 of the A New Tax 21 System (Goods and Services Tax) Act 1999. 22 evidential burden, in relation to a matter, means the burden of 23 adducing or pointing to evidence that suggests a reasonable 24 possibility that the matter exists or does not exist. 25 execution creditor means a creditor who has recovered judgment 26 and issued execution against a grantor. 27 expenses, in relation to the enforcement of a security interest in 28 collateral, includes advances, costs and taxes for obtaining 29 possession of, protecting (including insuring), maintaining, 30 preserving or repairing the collateral. 31 Example: For collateral that is intellectual property, expenses include the costs 32 of legal proceedings against infringers of the intellectual property. 33 Note: Reasonable expenses in relation to the enforcement of a security 34 interest are taken to be secured by a security interest unless the parties 35 agree otherwise (see subsection 18(5)). 18 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 express amendment, of this Act, has the meaning given by 2 section 244. 3 Family Court means the Family Court of Australia. 4 Federal Court means the Federal Court of Australia. 5 financial product has the meaning given by the Corporations Act 6 2001. 7 financial property means any of the following personal property: 8 (a) chattel paper; 9 (b) currency; 10 (c) a document of title; 11 (d) an investment instrument; 12 (e) a negotiable instrument. 13 financing change statement means data amending a registered 14 financing statement. 15 financing statement means data registered (or that is to be 16 registered) pursuant to an application for registration under 17 subsection 150(1). 18 Note: For requirements relating to financing statements, see Part 5.3 19 (Registration). 20 fish means any of the following, while alive: 21 (a) marine, estuarine or freshwater fish, or other aquatic animal 22 life, at any stage of their life history; 23 (b) oysters and other aquatic molluscs, crustaceans, echinoderms, 24 beachworms and other aquatic polychaetes; 25 but does not include any fish prescribed by the regulations for the 26 purposes of this definition. 27 fixtures means goods, other than crops, that are affixed to land. 28 foreign jurisdiction has the meaning given by section 39. 29 future advance means: 30 (a) an advance secured by a security interest (whether or not 31 made pursuant to an obligation), if the advance is made after 32 the security agreement was made; or Personal Property Securities Bill 2009 No. , 2009 19
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 10 1 (b) expenses in relation to the enforcement of a security interest 2 that are secured by the security interest. 3 Note: For the meaning of expenses, see the definition elsewhere in this 4 section. Reasonable expenses in relation to the enforcement of a 5 security interest are taken to be secured by the security interest unless 6 the parties agree otherwise (see subsection 18(5)). 7 general law means the principles and rules of the common law and 8 equity. 9 goods means personal property that is tangible property, including 10 the following: 11 (a) crops; 12 (b) livestock; 13 (c) wool; 14 (d) minerals that have been extracted (including hydrocarbons) 15 in any form, whether solid, liquid or gaseous and whether 16 organic or inorganic; 17 (e) satellites and other space objects; 18 but does not include financial property or an investment 19 entitlement. 20 grantor means: 21 (a) a person who owns the personal property, or has the interest 22 in the personal property, to which a security interest is 23 attached (whether or not the person owes payment or 24 performance of an obligation secured by the security 25 interest); or 26 (b) a person who receives goods under a commercial 27 consignment; or 28 (c) a lessee under a PPS lease; or 29 (d) a transferor of an account or chattel paper; or 30 (e) a transferee of, or successor to, the interest of a person 31 mentioned in paragraphs (a) to (d); or 32 (f) in relation to a registration with respect to a security interest: 33 (i) a person registered in the registration as a grantor; or 34 (ii) a person mentioned in paragraphs (a) to (e). 35 insolvency has the same meaning as in paragraph 51(xvii) of the 36 Constitution. 20 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 Note: Other parts of speech and grammatical forms of "insolvency" (for 2 example, "insolvent") have a corresponding meaning (see section 18A 3 of the Acts Interpretation Act 1901). 4 intangible property means personal property (including a licence) 5 that is not any of the following: 6 (a) financial property; 7 (b) goods; 8 (c) an investment entitlement. 9 intellectual property means any of the following rights (including 10 the right to be a party to proceedings in relation to such a right): 11 (a) the right to do any of the things mentioned in paragraphs 12 10(1)(a) to (f) of the Designs Act 2003 in relation to a design 13 that is registered under that Act; 14 (b) the right to exploit or work an invention, or to authorise 15 another person to exploit or work an invention, for which a 16 patent is in effect under the Patents Act 1990; 17 (c) the rights held by a person who is the registered owner of a 18 trade mark that is registered under the Trade Marks Act 1995; 19 (d) the right to do, or to license another person to do, an act 20 referred to in section 11 of the Plant Breeder's Rights Act 21 1994 in relation to propagating material of a plant variety; 22 (e) the right to do an act referred to in section 17 of the Circuit 23 Layouts Act 1989 in relation to an eligible layout during the 24 protection period of the layout; 25 (f) the right under the Copyright Act 1968 to do an act 26 comprised in the copyright in a literary, dramatic, musical or 27 artistic work or a published edition of such a work, or in a 28 sound recording, cinematograph film, television broadcast or 29 sound broadcast. 30 intellectual property licence means an authority or licence (within 31 the ordinary meaning of that term) to exercise rights comprising 32 intellectual property. 33 interest, in relation to personal property, includes a right in the 34 personal property. Personal Property Securities Bill 2009 No. , 2009 21
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 10 1 inventory means personal property (whether goods or intangible 2 property) that, in the course or furtherance, to any degree, of an 3 enterprise to which an ABN has been allocated: 4 (a) is held by the person for sale or lease, or has been leased by 5 the person as lessor; or 6 (b) is held by the person to be provided under a contract for 7 services, or has been so provided; or 8 (c) is held by the person as raw materials or as work in progress; 9 or 10 (d) is held, used or consumed by the person, as materials. 11 investment entitlement has the meaning given by section 15. 12 investment entitlement account has the meaning given by 13 section 15. 14 investment entitlement intermediary has the meaning given by 15 section 15. 16 investment instrument means any of the following financial 17 products: 18 (a) a share in a body, or a debenture of a body; 19 (b) a debenture, stock or bond issued or proposed to be issued by 20 a government; 21 (c) a derivative; 22 (d) a foreign exchange contract that is not a derivative; 23 (e) an assignable option to have an allotment of an investment 24 instrument (apart from this paragraph) made to the holder of 25 the option; 26 (f) an interest in, or a unit in an interest in, a managed 27 investment scheme; 28 (g) a unit in a share in a body; 29 (h) a financial product that is traded on a financial market that is: 30 (i) operated in accordance with an Australian market 31 licence; or 32 (ii) exempt from the operation of Part 7.2 of the 33 Corporations Act 2001; 34 (i) any other financial product that is prescribed by the 35 regulations; 22 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 (j) any financial product that consists of a combination of any 2 2 or more of the financial products mentioned in paragraphs (a) 3 to (i); 4 but does not include any of the following: 5 (k) the creation or transfer (including a successive transfer) of a 6 right to payment in connection with interests in land, if the 7 writing evidencing the creation or transfer does not 8 specifically identify that land; 9 (l) a document of title; 10 (m) an investment entitlement; 11 (n) a negotiable instrument. 12 A word or expression used in this definition has the same meaning 13 as in the Corporations Act 2001, subject to this Part. 14 land includes all estates and interests in land, whether freehold, 15 leasehold or chattel, but does not include fixtures. 16 land law has the meaning given by section 117. 17 law of the Commonwealth, a State or a Territory means: 18 (a) an Act of the Commonwealth, the State or the Territory; or 19 (b) an instrument made under such an Act. 20 licence means either of the following, if it is transferable by the 21 licensee (whether or not the right, entitlement, authority or licence 22 is exclusive, and whether or not a transfer is restricted or requires 23 consent): 24 (a) a right, entitlement or authority to do one or more of the 25 following: 26 (i) to manufacture, produce, sell, transport or otherwise 27 deal with personal property; 28 (ii) to provide services; 29 (iii) to explore for, exploit or use a resource; 30 (b) an intellectual property licence; 31 but does not include a right, entitlement or authority that is: 32 (c) granted by or under a law of the Commonwealth, a State or a 33 Territory; and 34 (d) declared by that law not to be personal property for the 35 purposes of this Act. Personal Property Securities Bill 2009 No. , 2009 23
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 10 1 Note: A right, entitlement or authority to which paragraph (c) or (d) applies 2 is not personal property for the purposes of this Act (for the meaning 3 of personal property, see elsewhere in this section). 4 livestock includes: 5 (a) while they are alive--alpacas, cattle, fish, goats, horses, 6 llamas, ostriches, poultry, sheep, swine and other animals; 7 and 8 (b) the unborn young of animals mentioned in paragraph (a). 9 located, in relation to personal property, or a person, has the 10 meaning given by section 235. 11 lower court has the meaning given by section 211. 12 matter includes act, omission, body, person and thing. 13 migrated security interest has the meaning given by section 332. 14 modification includes addition, omission and substitution. 15 motor vehicle has the meaning given by the regulations. 16 negotiable instrument means: 17 (a) a bill of exchange (within the meaning of the Bills of 18 Exchange Act 1909); or 19 (b) a cheque (within the meaning of the Cheques Act 1986); or 20 (c) a promissory note (within the meaning of section 89 of the 21 Bills of Exchange Act 1909); or 22 (d) any other writing that evidences a right to payment of 23 currency and that is of a kind that, in the ordinary course of 24 business, is transferred by delivery with any necessary 25 endorsement or assignment; or 26 (e) a letter of credit that states that it must be presented on 27 claiming payment; 28 but does not include any of the following: 29 (f) the creation or transfer (including a successive transfer) of a 30 right to payment in connection with interests in land, if the 31 writing evidencing the creation or transfer does not 32 specifically identify that land; 33 (g) a document of title; 34 (h) an investment entitlement. 24 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 new value means value other than value provided to reduce or 2 discharge an earlier debt or liability. 3 non-referring State means a State that is not a referring State. 4 Note: For the meaning of referring State, see section 244. 5 notice of objection has the meaning given by section 137. 6 penalty unit has the meaning given by section 4AA of the Crimes 7 Act 1914. 8 perfected has the meaning given by section 21. 9 personal property means property (including a licence) other than: 10 (a) land; or 11 (b) a right, entitlement or authority that is: 12 (i) granted by or under a law of the Commonwealth, a State 13 or a Territory; and 14 (ii) declared by that law not to be personal property for the 15 purposes of this Act. 16 Note: This Act does not apply to certain interests even if they are interests in 17 personal property (see section 8). 18 possession has a meaning affected by section 24. 19 PPS lease (short for Personal Property Securities lease) has the 20 meaning given by section 13. 21 PPS matter (short for Personal Property Securities matter) has the 22 meaning given by section 206. 23 predominantly: personal property is intended to be used 24 predominantly for personal, domestic or household purposes if: 25 (a) the personal property: 26 (i) is intended to be used only for those purposes; or 27 (ii) is intended to be used for other purposes as well, but is 28 intended to be mostly used for personal, domestic or 29 household purposes; and 30 (b) the personal property is not acquired as an investment. 31 present liability means a liability: Personal Property Securities Bill 2009 No. , 2009 25
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 10 1 (a) that has arisen; and 2 (b) whose extent or amount is fixed or capable of being 3 ascertained; 4 whether or not the liability is immediately due to be met. 5 proceeds has the meaning given by section 31. 6 provides: a security agreement provides for a security interest if the 7 interest arises under the agreement. 8 purchase money security interest has the meaning given by 9 section 14. 10 receiving court has the meaning given by section 210. 11 referring State has the meaning given by section 244. 12 register means the Personal Property Securities Register 13 established under section 147. 14 Registrar means the Registrar of Personal Property Securities. 15 Note: See Part 5.9 for the office of Registrar. 16 registration means a registered financing statement (as amended 17 by any registered financing change statement) with respect to: 18 (a) a security interest; or 19 (b) personal property prescribed by regulations made for the 20 purposes of paragraph 148(c); 21 registration commencement time has the meaning given by 22 section 306. 23 registration event has the meaning given by section 155. 24 registration time, with respect to collateral described in a 25 registration, has the meaning given by: 26 (a) section 160; or 27 (b) section 336 (preparatory registration with respect to 28 transitional security interests). 29 relevant superior court has the meaning given by section 211. 30 secured party: 26 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 The Dictionary Division 2 Section 10 1 (a) means a person who holds a security interest for the person's 2 own benefit or for the benefit of another person (or both); and 3 (b) if the holders of the obligations issued, guaranteed or 4 provided for under a security agreement are represented by a 5 trustee as the holder of the security interest--includes the 6 trustee; and 7 (c) in relation to a registration with respect to a security 8 interest--includes a person registered as a secured party in 9 the registration. 10 security agreement means: 11 (a) an agreement or act by which a security interest is created, 12 arises or is provided for; or 13 (b) writing evidencing such an agreement or act. 14 security interest has the meaning given by section 12. 15 serial number, in relation to collateral, means a serial number by 16 which the regulations require, or permit, the collateral to be 17 described in a registration. 18 State Family Court, in relation to a State, means a court of that 19 State to which section 41 of the Family Law Act 1975 applies 20 because of a Proclamation made under subsection 41(2) of that 21 Act. 22 superior court has the meaning given by section 211. 23 term deposit means a deposit made with an ADI that matures on a 24 particular date (whether or not the ADI can be required to repay the 25 deposit before that date). 26 this Act includes the regulations. 27 time of execution has the meaning given by section 74. 28 transfer matter has the meaning given by section 210. 29 transferring court has the meaning given by section 210. 30 transitional register has the meaning given by section 330. Personal Property Securities Bill 2009 No. , 2009 27
Chapter 1 Introduction Part 1.3 Definitions Division 2 The Dictionary Section 11 1 transitional security agreement has the meaning given by 2 section 307. 3 transitional security interest has the meaning given by 4 section 308. 5 value: 6 (a) means consideration that is sufficient to support a contract; 7 and 8 (b) includes an antecedent debt or liability; and 9 (c) in relation to the definition of purchase money security 10 interest--has a meaning affected by section 14. 11 verification statement has the meaning given by section 155. 12 wool means the natural fibre from any livestock that produce fleece 13 that can be shorn (such as sheep, goats, alpacas and llamas). 14 writing includes: 15 (a) the recording of words or data in any way (including 16 electronically), if, at the time the recording was made, it was 17 reasonable to expect that the words or data would be readily 18 accessible so as to be useable for subsequent reference; and 19 (b) the display, or other representation, of words or data by any 20 form of communication (including electronic), if: 21 (i) the display or representation is recorded in any way 22 (including electronically); and 23 (ii) at the time the recording was made, it was reasonable to 24 expect that the words or data would be readily 25 accessible so as to be useable for subsequent reference. 26 11 Application of the Acts Interpretation Act 1901 27 (1) The Acts Interpretation Act 1901, as in force at the start of the day 28 on which this Act receives the Royal Assent, applies to this Act. 29 (2) Amendments of the Acts Interpretation Act 1901 made after that 30 time do not apply to this Act. 31 28 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 Concepts relating to security interests and personal property Division 3 Section 12 1 Division 3--Concepts relating to security interests and 2 personal property 3 12 Meaning of security interest 4 (1) A security interest means an interest in relation to personal 5 property provided for by a transaction that, in substance, secures 6 payment or performance of an obligation (without regard to the 7 form of the transaction or the identity of the person who has title to 8 the property). 9 Note: For the application of this Act to interests, see section 8. 10 (2) For example, a security interest includes an interest in relation to 11 personal property provided by any of the following transactions, if 12 the transaction, in substance, secures payment or performance of 13 an obligation: 14 (a) a fixed charge; 15 (b) a floating charge; 16 (c) a chattel mortgage; 17 (d) a conditional sale agreement (including an agreement to sell 18 subject to retention of title); 19 (e) a hire purchase agreement; 20 (f) a pledge; 21 (g) a trust receipt; 22 (h) a consignment (whether or not a commercial consignment); 23 (i) a lease of goods (whether or not a PPS lease); 24 (j) an assignment; 25 (k) a transfer of title; 26 (l) a flawed asset arrangement. 27 (3) A security interest also includes the following interests in relation 28 to personal property, whether or not the transaction concerned, in 29 substance, secures payment or performance of an obligation: 30 (a) the interest of a transferee under a transfer of an account or 31 chattel paper; 32 (b) the interest of a consignor who delivers goods to a consignee 33 under a commercial consignment; 34 (c) the interest of a lessor or bailor of goods under a PPS lease. Personal Property Securities Bill 2009 No. , 2009 29
Chapter 1 Introduction Part 1.3 Definitions Division 3 Concepts relating to security interests and personal property Section 13 1 (4) An account debtor, in relation to an account or chattel paper, may 2 take a security interest in the account or chattel paper. 3 (5) A security interest does not include: 4 (a) a licence; or 5 (b) an interest of a kind prescribed by the regulations for the 6 purposes of this section. 7 (6) A security interest is not created only by an agreement or 8 undertaking to do either of the following: 9 (a) to postpone or subordinate a person's right to payment or 10 performance of all or any part of a debtor's obligation to 11 another person's right to payment or performance of all or 12 any part of another of the debtor's obligations; 13 (b) to postpone or subordinate all or any part of a secured party's 14 rights under a security agreement to all or any part of another 15 secured party's rights under another security agreement with 16 the same grantor. 17 13 Meaning of PPS lease 18 (1) A PPS lease means a lease or bailment of goods: 19 (a) for a term of more than one year; or 20 (b) for an indefinite term (even if the lease or bailment is 21 determinable by any party within a year of entering into the 22 lease or bailment); or 23 (c) for a term of up to one year that is automatically renewable, 24 or that is renewable at the option of one of the parties, for one 25 or more terms if the total of all the terms might exceed one 26 year; or 27 (d) for a term of up to one year, in a case in which the lessee or 28 bailee, with the consent of the lessor or bailor, retains 29 uninterrupted (or substantially uninterrupted) possession of 30 the leased or bailed property for a period of more than one 31 year after the day the lessee or bailee first acquired 32 possession of the property (but not until the lessee's or 33 bailee's possession extends for more than one year); or 34 (e) for goods that may or must be described by serial number in 35 accordance with the regulations, if the lease or bailment is: 30 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 Concepts relating to security interests and personal property Division 3 Section 14 1 (i) for a term of 90 days or more; or 2 (ii) for a term of less than 90 days, but is automatically 3 renewable, or is renewable at the option of one of the 4 parties, for one or more terms if the total of all the terms 5 might be 90 days or more; or 6 (iii) for a term of less than 90 days, in a case in which the 7 lessee or bailee, with the consent of the lessor or bailor, 8 retains uninterrupted (or substantially uninterrupted) 9 possession of the leased or bailed property for a period 10 of 90 days or more after the day the lessee or bailee first 11 acquired possession of the property, (but not until the 12 lessee's or bailee's possession extends for 90 days or 13 more). 14 (2) However, a PPS lease does not include: 15 (a) a lease by a lessor who is not regularly engaged in the 16 business of leasing goods; or 17 (b) a bailment by a bailor who is not regularly engaged in the 18 business of bailing goods; or 19 (c) a lease of consumer property as part of a lease of land where 20 the use of the property is incidental to the use and enjoyment 21 of the land; or 22 (d) a lease or bailment of personal property prescribed by the 23 regulations for the purposes of this definition, regardless of 24 the length of the term of the lease or bailment. 25 Bailments for value only 26 (3) This section only applies to a bailment if the bailor provides value 27 for the bailment to the bailee. 28 14 Meaning of purchase money security interest 29 General definition 30 (1) A purchase money security interest means any of the following: 31 (a) a security interest taken in collateral, to the extent that it 32 secures all or part of its purchase price; 33 (b) a security interest taken in collateral by a person who gives 34 value for the purpose of enabling the grantor to acquire rights Personal Property Securities Bill 2009 No. , 2009 31
Chapter 1 Introduction Part 1.3 Definitions Division 3 Concepts relating to security interests and personal property Section 14 1 in the collateral, to the extent that the value is applied to 2 acquire those rights; 3 (c) the interest of a lessor or bailor of goods under a PPS lease; 4 (d) the interest of a consignor who delivers goods to a consignee 5 under a commercial consignment. 6 Exceptions 7 (2) However, a purchase money security interest does not include: 8 (a) an interest acquired under a transaction of sale and lease back 9 to the seller; or 10 (b) an interest in collateral (as original collateral) that is chattel 11 paper, an investment instrument, an investment entitlement, a 12 monetary obligation or a negotiable instrument; or 13 (c) a security interest in collateral that (at the time the interest 14 attaches to the collateral) the grantor intends to use 15 predominantly for personal, domestic or household purposes. 16 Mixed securities 17 (3) If a security interest in collateral secures obligations covered by 18 subsection (7) (purchase money obligations) and other obligations, 19 the security interest is a purchase money security interest only to 20 the extent that it secures the purchase money obligations. 21 (4) If a security interest is granted in personal property (purchase 22 money collateral) that secures a purchase money obligation, 23 together with other collateral, the security interest is a purchase 24 money security interest only to the extent that it is granted in the 25 purchase money collateral. 26 Renewal etc. 27 (5) A purchase money security interest does not lose its status as such 28 only because the purchase money obligation is renewed, 29 refinanced, consolidated or restructured (whether or not by the 30 same secured party). 32 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 Concepts relating to security interests and personal property Division 3 Section 14 1 Application of payments to obligations 2 (6) In any transaction, if the extent to which a security interest is a 3 purchase money security interest depends on the application of a 4 payment to a particular obligation, the payment must be applied: 5 (a) in accordance with any method of application to which the 6 parties agree; or 7 (b) if the parties do not agree on a method--in accordance with 8 any intention of the debtor manifested at or before the time of 9 the payment; or 10 (c) if neither paragraph (a) nor (b) applies--in the following 11 order: 12 (i) to obligations that are not secured, in the order in which 13 those obligations were incurred; 14 (ii) to obligations that are secured, but not by purchase 15 money security interests, in the order in which those 16 obligations were incurred; 17 (iii) to obligations that are secured by purchase money 18 security interests, in the order in which those obligations 19 were incurred. 20 Purchase money obligations 21 (7) This subsection covers an obligation of a debtor incurred: 22 (a) as all or part of the purchase price of the collateral; or 23 (b) for value given to enable the grantor to acquire or use the 24 collateral (provided the collateral is so acquired or used). 25 References to purchase price and value 26 (8) In this section, a reference to a purchase price, or value, includes a 27 reference to credit charges and interest payable for the purchase or 28 loan credit. Personal Property Securities Bill 2009 No. , 2009 33
Chapter 1 Introduction Part 1.3 Definitions Division 3 Concepts relating to security interests and personal property Section 15 1 15 Meaning of investment entitlement and related terms 2 Meaning of investment entitlement 3 (1) An investment entitlement is the rights of a person in whose name 4 an investment entitlement intermediary maintains an investment 5 entitlement account. 6 Meaning of investment entitlement intermediary 7 (2) An investment entitlement intermediary is: 8 (a) a person who, in the course of business or other regular 9 activity, maintains investment entitlement accounts on behalf 10 of others, and includes a central securities depository; or 11 (b) a person (a CS facility licence holder) who operates a 12 securities transfer and settlement facility under an Australian 13 CS facility licence (within the meaning of the Corporations 14 Act 2001). 15 (3) To avoid doubt, an investment entitlement intermediary may also 16 maintain an investment entitlement account on its own behalf. 17 (4) An investment entitlement intermediary (including a central 18 securities depository) is an investment entitlement intermediary 19 only while acting in the capacity of an investment entitlement 20 intermediary. 21 (5) A person is not an investment entitlement intermediary merely 22 because the person: 23 (a) acts as a registrar or transfer agent for an issuer of a financial 24 product; or 25 (b) records details of interests in financial products in its own 26 books, being interests credited to investment entitlement 27 accounts in the names of other persons for whom the person 28 acts as manager or agent or otherwise in a purely 29 administrative capacity. 30 (6) A person is not an investment entitlement intermediary, in relation 31 to particular (or any) financial products issued under the laws of 32 Australia or a foreign country, if: 34 Personal Property Securities Bill 2009 No. , 2009
Introduction Chapter 1 Definitions Part 1.3 Concepts relating to security interests and personal property Division 3 Section 15 1 (a) the person credits interests in financial products to 2 investment entitlement accounts maintained by the person, in 3 the person's capacity as operator of a system for holding and 4 transferring such interests, on records of the issuer or other 5 records which constitute the primary record of entitlement to 6 them as against the issuer; and 7 (b) the country under which the financial products are issued 8 makes a written declaration that the person is not to be an 9 investment entitlement intermediary for the purposes of this 10 Act in relation to the particular financial product, or in 11 relation to all financial products; and 12 (c) the regulations prescribe the person for the purposes of this 13 subsection. 14 Meaning of investment entitlement account 15 (7) In this Act: 16 investment entitlement account means: 17 (a) an account to which interests in financial products may be 18 credited or debited; or 19 (b) in the case of an account maintained by a CS facility licence 20 holder--writing that records holdings and transfers 21 maintained by the CS facility licence holder in the course of 22 operating the facility. 23 Personal Property Securities Bill 2009 No. , 2009 35
Chapter 2 General rules relating to security interests Part 2.1 Guide to this Chapter Section 16 1 Chapter 2--General rules relating to security 2 interests 3 Part 2.1--Guide to this Chapter 4 5 16 Guide to this Chapter 6 This Chapter sets out general rules relating to security interests in 7 personal property. 8 Part 2.2 contains some general principles relating to these security 9 interests, the agreements that govern them and their enforceability. 10 The Part describes how a security interest is attached to personal 11 property and perfected. 12 Part 2.3 deals with the concepts of possession and control of 13 personal property. 14 Part 2.4 contains some rules about attachment and perfection of 15 security interests in particular situations. 16 Part 2.5 sets out circumstances in which a person takes an interest 17 in personal property free of a security interest in the property. 18 Part 2.6 sets out how to work out the priority between competing 19 security interests (and in some cases, other sorts of interests) in 20 personal property. If a specific rule does not deal with the priority 21 between security interests, then the priority is determined in 22 accordance with the default rules in section 55. 23 Part 2.7 contains some rules about transferring and assigning 24 interests in collateral. 25 36 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Security interests: general principles Part 2.2 Section 17 1 Part 2.2--Security interests: general principles 2 3 17 Guide to this Part 4 This Part sets out some general principles about security interests. 5 These principles relate to the enforceability of security agreements 6 against grantors of security interests and third parties. 7 A security interest is only effective if it has attached to collateral. 8 A security interest attaches to collateral when the grantor has rights 9 in the collateral, or can transfer it to the secured party, and value is 10 given, or the security interest otherwise arises. 11 A security interest is only enforceable against a third party if it has 12 attached to collateral and the secured party possesses the collateral, 13 has perfected the security interest by controlling the collateral or 14 has entered into a written security agreement that describes the 15 collateral. 16 This Part also contains rules about how a security interest is 17 perfected and how it is continuously perfected. A perfected 18 security interest has priority over an unperfected security interest, 19 and the security interest that has been continuously perfected for 20 the longest time generally has the highest priority (see Part 2.6 for 21 priority rules). 22 Perfection occurs when a security interest has attached to collateral 23 and any further steps needed to make the security interest effective 24 against third parties have been taken. 25 These steps involve registration on the Personal Property Securities 26 Register or possession or control of the collateral. In certain 27 situations this Act provides for perfection, or temporary perfection, 28 by the operation of the Act itself. 29 18 General rules about security agreements and security interests 30 (1) A security agreement is effective according to its terms. Personal Property Securities Bill 2009 No. , 2009 37
Chapter 2 General rules relating to security interests Part 2.2 Security interests: general principles Section 19 1 (2) A security agreement may provide for security interests in 2 after-acquired property. 3 (3) A security interest in after-acquired property attaches without 4 specific appropriation by the grantor. 5 (4) A security agreement may provide for future advances. 6 (5) A security interest is taken to secure reasonable expenses in 7 relation to the enforcement of the security interest, unless the 8 parties agree otherwise. 9 19 Enforceability of security interests against grantors--attachment 10 Attachment required for enforceability 11 (1) A security interest is enforceable against a grantor in respect of 12 particular collateral only if the security interest has attached to the 13 collateral. 14 Attachment rule 15 (2) A security interest attaches to collateral when: 16 (a) the grantor has rights in the collateral, or the power to 17 transfer rights in the collateral to the secured party; and 18 (b) either: 19 (i) value is given for the security interest; or 20 (ii) the grantor does an act by which the security interest 21 arises. 22 Time of attachment 23 (3) Subsection (2) does not apply if the parties to a security agreement 24 have agreed that a security interest attaches at a later time, in which 25 case the security interest attaches at the time specified in the 26 agreement. 27 (4) To avoid doubt, a reference in a security agreement to a floating 28 charge is not a reference to an agreement that the security interest 29 created by the floating charge attaches at a time later than provided 30 under subsection (2). 38 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Security interests: general principles Part 2.2 Section 20 1 Goods leased, consigned or sold under a conditional sale 2 agreement. 3 (5) For the purposes of paragraph (2)(a), a grantor has rights in goods 4 that are leased to the grantor under a PPS lease, consigned to the 5 grantor, or sold to the grantor under a conditional sale agreement 6 (including an agreement to sell subject to retention of title) when 7 the grantor obtains possession of the goods. 8 (6) Subsection (5) does not limit any other rights the grantor may have 9 in the goods. 10 20 Enforceability of security interests against third parties 11 General rule 12 (1) A security interest is enforceable against a third party in respect of 13 particular collateral only if: 14 (a) the security interest is attached to the collateral; and 15 (b) one of the following applies: 16 (i) the secured party possesses the collateral; 17 (ii) the secured party has perfected the security interest by 18 control; 19 (iii) a security agreement that provides for the security 20 interest covers the collateral in accordance with 21 subsection (2). 22 Note: For possession and control of collateral, see Part 2.3. 23 Written security agreements 24 (2) A security agreement covers collateral in accordance with this 25 subsection if: 26 (a) the security agreement is evidenced by writing that is: 27 (i) signed by the grantor (see subsection (3)); or 28 (ii) adopted or accepted by the grantor by an act specified in 29 the writing that is done with the intention of adopting or 30 accepting the writing; and 31 (b) the writing evidencing the agreement contains: 32 (i) a description of the particular collateral, subject to 33 subsections (4) and (5); or Personal Property Securities Bill 2009 No. , 2009 39
Chapter 2 General rules relating to security interests Part 2.2 Security interests: general principles Section 20 1 (ii) a statement that a security interest is taken in all of the 2 grantor's present and after-acquired property; or 3 (iii) a statement that a security interest is taken in all of the 4 grantor's present and after-acquired property except 5 specified items or classes of personal property. 6 Methods of signing writing 7 (3) Without limiting subparagraph (2)(a)(i), for the purposes of that 8 subparagraph a grantor is taken to sign writing if, with the intention 9 of identifying the grantor and adopting, or accepting, the writing, 10 the person applies: 11 (a) writing (including a symbol) executed or otherwise adopted 12 by the person; or 13 (b) writing wholly or partly encrypted, or otherwise processed, 14 by the person. 15 Note: For the meaning of writing, see section 10. 16 Personal property descriptions--consumer property, equipment 17 and inventory 18 (4) If particular personal property is described using the term 19 "consumer property", "commercial property" or "equipment" in 20 the writing evidencing a security agreement, subparagraph (2)(b)(i) 21 is satisfied only if the personal property is more particularly 22 described, in addition, by reference to item or class. 23 (5) If particular personal property is described using the term 24 "inventory" in the writing evidencing a security agreement, 25 subparagraph (2)(b)(i) is satisfied only while the personal property 26 is held or leased by the grantor as inventory. 27 Proceeds 28 (6) A security interest in proceeds is enforceable against a third party 29 whether or not the security agreement providing for the security 30 interest contains a description of the proceeds. 31 Note: Section 32 deals with whether a security interest in collateral attaches 32 to proceeds of the collateral. 40 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Security interests: general principles Part 2.2 Section 21 1 21 Perfection--main rule 2 (1) A security interest in particular collateral is perfected if: 3 (a) the security interest is temporarily perfected, or otherwise 4 perfected, by force of this Act; or 5 (b) both: 6 (i) the security interest is attached to the collateral; and 7 (ii) subsection (2) applies. 8 (2) This subsection applies if: 9 (a) for any collateral, a registration is effective with respect to 10 the collateral; or 11 (b) for any collateral, the secured party has possession of the 12 collateral (other than possession as a result of seizure or 13 repossession); or 14 (c) for the following kinds of collateral, the secured party has 15 control of the collateral: 16 (i) an ADI account; 17 (ii) an investment entitlement; 18 (iii) an investment instrument; 19 (iv) a negotiable instrument that is not evidenced by a 20 certificate; 21 (v) a right evidenced by a letter of credit that states that the 22 letter of credit must be presented on claiming payment 23 or requiring the performance of an obligation; 24 (vi) satellites and other space objects. 25 Note: For what constitutes possession and control of collateral, see Part 2.3. 26 (3) A security interest may be perfected regardless of the order in 27 which attachment and any step mentioned in subsection (2) occur. 28 (4) A single registration may perfect one or more security interests. 29 22 Perfection--goods possessed by a bailee 30 Perfection of security interest 31 (1) A security interest that has attached to goods in the possession of a 32 bailee (other than the grantor or the debtor) is perfected if any of Personal Property Securities Bill 2009 No. , 2009 41
Chapter 2 General rules relating to security interests Part 2.2 Security interests: general principles Section 22 1 the following applies, regardless of when the security interest 2 attached to the goods: 3 (a) the security interest is perfected by registration, as provided 4 by section 21; 5 (b) the security interest is perfected by possession, as provided 6 by section 21, because the bailee possesses the property on 7 behalf of the secured party; 8 (c) the bailee issues a document of title to the goods in the name 9 of the secured party; 10 (d) the bailee issues a negotiable document of title to the goods, 11 and the secured party has a perfected security interest in the 12 document. 13 Temporary perfection while negotiable document of title in transit 14 (2) A security interest in goods in the possession of a bailee (other than 15 the grantor or the debtor) is temporarily perfected for the period: 16 (a) starting at the time the bailee issues a negotiable document of 17 title to the goods; and 18 (b) ending at the end of the day the secured party takes 19 possession of the document. 20 (3) The security interest in the goods becomes unperfected at the end 21 of the period mentioned in subsection (2), unless the security 22 interest is perfected otherwise than under subsection (2) before the 23 end of the period. 24 (4) However, subsection (2) does not apply, and is taken never to have 25 applied, unless, before the end of the period of 5 business days 26 after the day of issue of the negotiable document of title: 27 (a) the secured party takes possession of the document; or 28 (b) the security interest is perfected otherwise than under that 29 subsection. 30 42 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Possession and control of personal property Part 2.3 Section 23 1 Part 2.3--Possession and control of personal 2 property 3 4 23 Guide to this Part 5 This Part deals with the concepts of possession and control of 6 personal property. 7 A grantor and secured party cannot both have possession of 8 collateral. There are special rules about possession of the 9 following: 10 (a) goods in the possession of a common carrier; 11 (b) negotiable instruments not evidenced 12 electronically; 13 (c) chattel paper evidenced electronically; 14 (d) investment instruments evidenced by a certificate. 15 Control of certain types of personal property is effective to perfect 16 a security interest in the property (see paragraph 21(2)(c)). This 17 Part includes some special rules about control of the following: 18 (a) ADI accounts; 19 (b) investment entitlements; 20 (c) investment instruments; 21 (d) letters of credit; 22 (e) negotiable instruments not evidenced by a 23 certificate. Personal Property Securities Bill 2009 No. , 2009 43
Chapter 2 General rules relating to security interests Part 2.3 Possession and control of personal property Section 24 1 24 Possession 2 Possession by one party exclusive of possession by others 3 (1) A secured party cannot have possession of personal property if the 4 property is in the actual or apparent possession of the grantor or 5 debtor, or another person on behalf of the grantor or debtor. 6 (2) A grantor or debtor cannot have possession of personal property if 7 the property is in the actual or apparent possession of the secured 8 party, or another person on behalf of the secured party. 9 Timing rule for possession of goods transported by common 10 carrier 11 (3) A grantor or debtor to whom goods are transported by a common 12 carrier acquires possession of the goods only when the earlier of 13 the following occurs: 14 (a) the grantor or debtor, or another person at the request of the 15 grantor or debtor, actually acquires possession of the goods; 16 (b) the grantor or debtor, or another person at the request of the 17 grantor or debtor, acquires possession of a document of title 18 to the goods. 19 Possession of certain negotiable instruments 20 (4) A person (the first person) has possession of a negotiable 21 instrument that is not evidenced by an electronic record if, and only 22 if, the first person, or another person on behalf of the first person, 23 takes physical possession of the instrument. 24 Note: For possession of investment instruments, see subsection 24(6). 25 Possession of chattel paper that is evidenced electronically 26 (5) A secured party has possession of chattel paper that is evidenced 27 by an electronic record if, and only if: 28 (a) a single authoritative copy of the record exists which is 29 unique, identifiable and unalterable (except as set out below); 30 and 31 (b) the authoritative copy identifies the secured party as the 32 assignee of the record; and 44 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Possession and control of personal property Part 2.3 Section 25 1 (c) the authoritative copy is communicated to, and maintained 2 by, the secured party or the secured party's agent; and 3 (d) copies or revisions of the record that change the assignee of 4 the authoritative copy can be made only with the 5 participation of the secured party; and 6 (e) each copy of the authoritative copy (or any copy of such a 7 copy) is readily identifiable as a copy that is not the 8 authoritative copy; and 9 (f) any revision of the authoritative copy is readily identifiable 10 as an authorised or unauthorised copy. 11 Possession of investment instruments 12 (6) Despite subsections (1) and (2), a person (the possessor) has 13 possession of an investment instrument that is evidenced by a 14 certificate if, and only if: 15 (a) the certificate specifies the person who is entitled to the 16 investment instrument; and 17 (b) a transfer of the investment instrument may be registered on 18 books maintained for that purpose by or on behalf of the 19 issuer (or the certificate states that a transfer of the 20 instrument may be so registered); and 21 (c) any of the following applies: 22 (i) the possessor has possession of the certificate; 23 (ii) another person (other than the grantor or the debtor) has 24 possession of the certificate on behalf of the possessor; 25 (iii) the registered owner (who is not the grantor or debtor) 26 of the investment instrument acknowledges in writing 27 that he, she or it has possession of the investment 28 instrument on behalf of the possessor. 29 25 Control of an ADI account 30 (1) A secured party has control of an ADI account if: 31 (a) any one or more of the following applies: 32 (i) the secured party is the ADI; 33 (ii) the secured party is able to direct disposition of the 34 funds from the account without further consent by the 35 grantor; Personal Property Securities Bill 2009 No. , 2009 45
Chapter 2 General rules relating to security interests Part 2.3 Possession and control of personal property Section 26 1 (iii) the secured party becomes the ADI's customer with 2 respect to the account; and 3 (b) except if subparagraph (a)(i) applies--depositing an amount 4 in the ADI account does not result in any person coming 5 under a present liability to pay: 6 (i) the debtor; or 7 (ii) if the debtor is a body corporate--a related body 8 corporate (within the meaning of the Corporations Act 9 2001). 10 (2) A secured party has control under subsection (1) even if the 11 grantor retains the right to direct the disposition of funds from the 12 account. 13 (3) To avoid doubt, this section applies in relation to: 14 (a) perfecting a security interest by control; and 15 (b) determining whether personal property is a circulating asset 16 under section 340. 17 (4) Subsection (1) does not limit the ways in which a secured party has 18 control of an ADI account. 19 26 Control of investment entitlements 20 (1) A secured party has control of an investment entitlement that is 21 credited to an investment entitlement account if, and only if: 22 (a) there is an agreement in force between the secured party, the 23 grantor and the investment entitlement intermediary who 24 maintains the account; and 25 (b) the agreement has the effect that: 26 (i) the intermediary must not comply with instructions 27 given by the grantor in relation to the investment 28 entitlement without seeking the consent of the secured 29 party (or a person who has agreed to act on the 30 instructions of the secured party); and 31 (ii) the intermediary must comply, or must comply in one or 32 more specified circumstances, with instructions 33 (including instructions to debit the account) given by the 34 secured party in relation to the investment entitlement 35 without seeking the consent of the grantor (or any 46 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Possession and control of personal property Part 2.3 Section 27 1 person who has agreed to act on the instructions of the 2 grantor). 3 (2) For the purposes of this section, a secured party has control of an 4 investment entitlement even if the person (who might be the 5 grantor) in whose name the investment entitlement intermediary 6 maintains the account to which the investment entitlement is 7 credited retains the right: 8 (a) to make substitutions for the instrument; or 9 (b) to originate instructions to the issuer; or 10 (c) to otherwise deal with the instrument. 11 27 Control of investment instruments 12 Main rule 13 (1) A person has control of an investment instrument if, and only if, 14 this section so provides. 15 Control of any investment instrument 16 (2) A person, other than the debtor or grantor, has control of an 17 investment instrument (whether or not the instrument is evidenced 18 by a certificate) if the issuer of the instrument registers the person 19 as the registered owner of the instrument. 20 Control of investment instruments evidenced by certificates 21 (3) A person (the controller) has control of an investment instrument 22 that is evidenced by a certificate if: 23 (a) the controller has possession of the instrument; and 24 (b) the controller (or a person who has agreed to act on the 25 instructions of the controller) is able to: 26 (i) transfer the instrument to the controller, or to another 27 person; or 28 (ii) otherwise deal with the instrument. 29 Control of investment instruments not evidenced by certificates 30 (4) A person has control of an investment instrument that is not 31 evidenced by a certificate if: Personal Property Securities Bill 2009 No. , 2009 47
Chapter 2 General rules relating to security interests Part 2.3 Possession and control of personal property Section 28 1 (a) there is an agreement in force between the person and the 2 grantor; and 3 (b) the agreement has the effect that the person (or a person who 4 has agreed to act on the instructions of the first person) is 5 able to initiate or control sending instructions by which the 6 investment instrument could be transferred or otherwise dealt 7 with. 8 (5) A person (the controller) has control of an investment instrument 9 that is not evidenced by a certificate if: 10 (a) either: 11 (i) the issuer of the instrument registers another person 12 (who is not the grantor or debtor) as the registered 13 owner of the investment instrument on behalf of the 14 controller; or 15 (ii) the registered owner (who is not the grantor or debtor) 16 of the investment instrument acknowledges in writing 17 that he, she or it holds the investment instrument on 18 behalf of the controller; and 19 (b) there is an agreement in force under which the controller (or 20 a person who has agreed to act on the instructions of the 21 controller) is able to initiate or control the sending of some or 22 all electronic messages or other electronic communications 23 by which the investment instrument could be transferred or 24 otherwise dealt with. 25 (6) For the purposes of this section, a person has control of an 26 investment instrument even if the registered owner of the 27 investment instrument (who might be the grantor) retains the right: 28 (a) to make substitutions for the instrument; or 29 (b) to originate instructions to the issuer; or 30 (c) to otherwise deal with the instrument. 31 28 Control of a letter of credit 32 A secured party does not have control of a right evidenced by a 33 letter of credit, to the extent of any right to payment or 34 performance of an obligation by the issuer or a nominated person, 35 unless the issuer or nominated person has consented to assigning 36 the proceeds of the letter of credit to the secured party. 48 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Possession and control of personal property Part 2.3 Section 29 1 29 Control of negotiable instruments that are not evidenced by a 2 certificate 3 (1) A secured party has control of a negotiable instrument that is not 4 evidenced by a certificate if, and only if: 5 (a) the instrument is able to be transferred in accordance with the 6 operating rules of a clearing and settlement facility; and 7 (b) there is an agreement in force under which the secured party 8 (or a person who has agreed to act on the instructions of the 9 secured party) controls the sending of some or all electronic 10 messages or other electronic communications by which the 11 instrument could be transferred. 12 (2) For the purposes of subsection (1), a secured party has control of a 13 negotiable instrument even if the registered owner (who might be 14 the grantor) retains the right: 15 (a) to make substitutions for the instrument; or 16 (b) to originate instructions to the issuer; or 17 (c) to otherwise deal with the instrument. 18 Personal Property Securities Bill 2009 No. , 2009 49
Chapter 2 General rules relating to security interests Part 2.4 Attachment and perfection: specific rules Division 1 Introduction Section 30 1 Part 2.4--Attachment and perfection: specific rules 2 Division 1--Introduction 3 30 Guide to this Part 4 This Part contains rules about when attachment and perfection 5 (including, in some circumstances, temporary perfection) of 6 security interests occurs in particular situations. 7 Division 2 deals with security interests in the proceeds of 8 collateral, and in collateral after it is transferred. 9 Proceeds of collateral are identifiable or traceable personal 10 property that is derived from dealings with the collateral. Proceeds 11 also includes certain insurance or indemnity rights, payments in 12 redemption of certain intangible collateral, certain rights of 13 licensors of intellectual property, and certain rights relating to 14 investment instruments and investment entitlements. 15 A security interest in collateral continues in the proceeds (except in 16 certain cases). Division 2 also includes some other rules about the 17 perfection of such interests and their enforcement. Special 18 provisions are made for the perfection and temporary perfection of 19 security interests in proceeds, and for the temporary perfection of 20 security interests in collateral after it is transferred. 21 Division 3 deals with the perfection (and temporary perfection) of 22 security interests in goods that are returned to the grantor or the 23 debtor. After goods are returned for certain dealings (for example, 24 sale or exchange), a security interest in the goods that had 25 previously been perfected otherwise than by registration may be 26 temporarily perfected for 5 business days. The same period of 27 temporary perfection is provided in similar circumstances if 28 possession or control of a negotiable instrument or investment 29 instrument is returned to the grantor or debtor. 30 If goods are taken free of a security interest, but are repossessed by 31 the grantor or debtor, the security interest reattaches to the goods, 50 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Attachment and perfection: specific rules Part 2.4 Introduction Division 1 Section 30 1 and (if the security interest had been perfected by registration) the 2 perfection status of the security interest is unaffected. 3 Division 3 also provides special rules for the attachment and 4 perfection of a security interest in goods if a sale or lease of the 5 goods creates an account or chattel paper that is transferred to 6 another person. 7 Division 4 deals with situations where collateral or a grantor of a 8 security interest is relocated from a foreign jurisdiction to 9 Australia. The security interest in the collateral is temporarily 10 perfected if certain conditions are met. 11 Personal Property Securities Bill 2009 No. , 2009 51
Chapter 2 General rules relating to security interests Part 2.4 Attachment and perfection: specific rules Division 2 Proceeds and transfer Section 31 1 Division 2--Proceeds and transfer 2 31 Meaning of proceeds 3 (1) In this Act: 4 proceeds of collateral to which a security interest is (or is to be) 5 attached means identifiable or traceable personal property of the 6 following types, subject to subsections (2) and (3): 7 (a) personal property that is derived directly or indirectly from a 8 dealing with the collateral (or proceeds of the collateral); 9 (b) a right to an insurance payment or other payment as 10 indemnity or compensation for loss of, or damage to, the 11 collateral (or proceeds of the collateral); 12 (c) a payment made in total or partial discharge or redemption of 13 the collateral (or proceeds of the collateral), if the collateral 14 (or proceeds) consists of any of the following: 15 (i) chattel paper; 16 (ii) intangible property; 17 (iii) an investment instrument; 18 (iv) an investment entitlement; 19 (v) a negotiable instrument; 20 (d) if the collateral is intellectual property (or an intellectual 21 property licence)--in addition to any other proceeds, the 22 right of a licensor of the property (whether or not the 23 property is itself a licence) to receive payments under any 24 licence agreement in relation to the collateral; 25 (e) if the collateral is an investment instrument or investment 26 entitlement--any of the following: 27 (i) rights arising out of the collateral; 28 (ii) property collected on the collateral; 29 (iii) property distributed on account of the collateral. 30 Note: In section 140 (distribution of proceeds received by secured party) 31 proceeds has its ordinary meaning, so this definition does not apply. 32 Whether proceeds are traceable 33 (2) Proceeds are traceable whether or not there is a fiduciary 34 relationship between the person who has a security interest in the 52 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Attachment and perfection: specific rules Part 2.4 Proceeds and transfer Division 2 Section 32 1 proceeds, as provided in section 32, and the person who has rights 2 in or has dealt with the proceeds. 3 Restriction to proceeds in which grantor has a transferable interest 4 (3) However, personal property is proceeds only if: 5 (a) either: 6 (i) the grantor has an interest in the proceeds; or 7 (ii) the grantor has the power to transfer rights in the 8 proceeds to the secured party (or to a person nominated 9 by the secured party); and 10 (b) the interest in the proceeds does not arise because of the 11 operation of paragraph 140(2)(f). 12 Note: Paragraph 140(2)(f) provides for the distribution of an amount or 13 proceeds to the grantor upon the enforcement of a security 14 interest. 15 Crops and livestock 16 (4) The proceeds of collateral that is crops include the harvested 17 produce of the crops, if the produce is identifiable or traceable. 18 (5) The proceeds of collateral that is livestock include products of the 19 livestock (for example, meat or wool), if the products are 20 identifiable or traceable. 21 (6) However, livestock are not the proceeds of collateral merely 22 because they are the unborn young, or the offspring, of livestock 23 that are collateral. 24 32 Proceeds--attachment 25 Continuation of security interest in collateral, and attachment to 26 proceeds 27 (1) Subject to this Act, if collateral gives rise to proceeds (by being 28 dealt with or otherwise), the security interest: 29 (a) continues in the collateral, unless the secured party expressly 30 or impliedly authorised a dealing giving rise to the proceeds; 31 and Personal Property Securities Bill 2009 No. , 2009 53
Chapter 2 General rules relating to security interests Part 2.4 Attachment and perfection: specific rules Division 2 Proceeds and transfer Section 32 1 (b) attaches to the proceeds, unless the security agreement 2 provides otherwise. 3 Note 1: The effect of paragraph (a) is to extinguish the security interest in the 4 collateral if the secured party expressly or impliedly authorised the 5 dealing mentioned. 6 Note 2: A transferee can also take the collateral free of the security interest 7 because of the operation of another provision of this Act (for example, 8 under Part 2.5). 9 Enforcement of security interest against collateral and proceeds 10 (2) If the secured party enforces a security interest against both 11 collateral (other than an investment instrument) and proceeds, the 12 amount secured by the security interest in the collateral and 13 proceeds is limited to the market value of the collateral 14 immediately before the collateral gave rise to the proceeds. 15 Note: For the enforceability of a security interest against a third party in 16 relation to proceeds, see also subsection 20(6). 17 (3) However, subsection (2) does not apply if, at the time of the 18 transfer of the collateral, the transferee has actual or constructive 19 knowledge that the transfer was in breach of a security agreement 20 that provides for the security interest in the collateral. 21 (4) To avoid doubt, subsection (2) does not affect any right the secured 22 party may have to recover the amount secured without enforcing 23 the security interest. 24 Priority of proceeds 25 (5) For the purposes of section 55 (default priority rules), the time of 26 registration or possession in relation to original collateral, or the 27 time of perfection of a security interest in original collateral, is also 28 the time of registration, possession or perfection in relation to the 29 proceeds of the original collateral. 30 Note: The effect of subsection (5) is that the security interest in the proceeds 31 has the same default priority as the security interest in the original 32 collateral. 54 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Attachment and perfection: specific rules Part 2.4 Proceeds and transfer Division 2 Section 33 1 33 Proceeds--perfection and temporary perfection 2 Perfection by reference to perfection of security interest in original 3 collateral 4 (1) A security interest in proceeds is perfected if the security interest in 5 the original collateral is perfected by a registration that: 6 (a) describes the proceeds, if the description complies with any 7 regulations made for the purposes of paragraph (d) of item 4 8 of the table in section 153 (financing statements with respect 9 to security interests); or 10 (b) covers the original collateral, if the proceeds are of a kind 11 that are within the description of the original collateral; or 12 (c) covers the original collateral, if the proceeds consist of 13 currency, cheques or an ADI account, or a right to an 14 insurance payment or any other payment as indemnity or 15 compensation for loss or damage to the collateral or 16 proceeds. 17 Temporary perfection in other situations 18 (2) If a security interest in original collateral is perfected, but a 19 security interest in the proceeds is not perfected under 20 subsection (1), the security interest in the proceeds is temporarily 21 perfected for the period starting at the time the security interest in 22 the original collateral attaches to the proceeds and ending at the 23 end of 5 business days afterwards. 24 (3) However, the security interest in the proceeds under subsection (2) 25 becomes unperfected at the end of the period mentioned in that 26 subsection, unless the security interest in the proceeds is perfected 27 otherwise than under the subsection before the end of the period. 28 34 Transferred collateral--temporary perfection after transfer 29 Security interest is temporarily perfected 30 (1) If collateral is transferred, and at the time of the transfer a secured 31 party held a perfected security interest in the collateral, the security 32 interest is temporarily perfected for the period starting at the time 33 of the transfer and ending at the earliest of the following times: Personal Property Securities Bill 2009 No. , 2009 55
Chapter 2 General rules relating to security interests Part 2.4 Attachment and perfection: specific rules Division 2 Proceeds and transfer Section 34 1 (a) the end of the month that is 24 months after the time of the 2 transfer; 3 (b) if the security interest was perfected by registration at the 4 time of the transfer--the end time for the registration (as 5 registered at the time of the transfer); 6 (c) if another security interest attaches to the collateral at or after 7 the time of the transfer, and the other security interest is 8 perfected: 9 (i) in a case in which the original secured party consented 10 to the transfer--the end of 5 business days after the day 11 of the transfer; or 12 (ii) in a case in which the original secured party otherwise 13 acquires the actual or constructive knowledge required 14 to perfect the original secured party's interest by 15 registration (or to re-perfect the interest by an 16 amendment of a registration)--the end of 5 business 17 days after the day the original secured party acquires the 18 knowledge. 19 Note: The knowledge required is the knowledge of the transferee's (the new 20 grantor's) details. Unless these are registered, the original secured 21 party's registration may be ineffective under section 165. 22 Security interest becomes unperfected 23 (2) However, the security interest becomes unperfected immediately 24 after the earliest time mentioned in subsection (1), unless, at or 25 before that time, the security interest is perfected otherwise than 26 under subsection (1). 27 Transfer free of security interest 28 (3) This section does not apply in relation to a transfer of collateral if 29 the transferee takes the collateral free of the security interest. 30 56 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Attachment and perfection: specific rules Part 2.4 Collateral returned to grantor or debtor Division 3 Section 35 1 Division 3--Collateral returned to grantor or debtor 2 35 Returned collateral--from bailee 3 Security interest is temporarily perfected 4 (1) A security interest in goods that is perfected by possession of the 5 goods or a negotiable document of title to the goods under 6 subsection 22(1) is temporarily perfected for the period covered by 7 subsection (2) of this section if possession of the goods or 8 document is given to the grantor or the debtor at a particular time 9 (the action time) for the purpose of any of the following actions in 10 relation to the goods: 11 (a) sale; 12 (b) exchange; 13 (c) any other action in preparation for sale or exchange, 14 including (but not limited to) the following: 15 (i) loading; 16 (ii) unloading; 17 (iii) storing; 18 (iv) shipping; 19 (v) manufacturing; 20 (vi) processing; 21 (vii) packaging. 22 Note: Subsection 22(1) provides for the perfection of a security interest in 23 goods possessed by a bailee. 24 (2) This subsection covers the period starting at the action time and 25 ending at the end of 5 business days after the day the action time 26 occurs. 27 Security interest becomes unperfected after 5 business days 28 (3) However, the security interest in the goods or document becomes 29 unperfected at the end of the period covered by subsection (2), 30 unless the security interest is perfected otherwise than under 31 subsection (1) before the end of the period. Personal Property Securities Bill 2009 No. , 2009 57
Chapter 2 General rules relating to security interests Part 2.4 Attachment and perfection: specific rules Division 3 Collateral returned to grantor or debtor Section 36 1 36 Returned collateral--negotiable instruments and investment 2 instruments 3 Security interest is temporarily perfected 4 (1) A security interest in a negotiable instrument or an investment 5 instrument that is perfected by possession or control is temporarily 6 perfected for the period covered by subsection (2) if possession or 7 control of the goods or document is given to the grantor or the 8 debtor at a particular time (the action time) for the purpose of any 9 of the following actions in relation to the goods: 10 (a) sale; 11 (b) exchange; 12 (c) presentation; 13 (d) collection; 14 (e) renewal; 15 (f) registration (other than under this Act) for the purposes of a 16 transfer. 17 (2) This subsection covers the period starting at the action time and 18 ending at the end of 5 business days after the day the action time 19 occurs. 20 Security interest becomes unperfected after 5 business days 21 (3) However, the security interest in the instrument becomes 22 unperfected at the end of the period covered by subsection (2), 23 unless the security interest in the instrument is perfected otherwise 24 than under subsection (1) before the end of the period. 25 37 Returned collateral--following sale or lease 26 Reattachment of security interest 27 (1) If a grantor or debtor sells or leases goods that are subject to a 28 security interest, and the buyer or lessee takes the goods free of the 29 security interest because of the operation of this Act, the security 30 interest reattaches to the goods at a particular time (the 31 repossession time) if, at that time, the goods come into the 32 possession of the grantor or debtor, or of a transferee of chattel 58 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Attachment and perfection: specific rules Part 2.4 Collateral returned to grantor or debtor Division 3 Section 38 1 paper created by the sale or lease, in any of the following 2 circumstances: 3 (a) in the case of a sale--the contract of sale is rescinded; 4 (b) in the case of a lease--the lease expires or is rescinded; 5 (c) the transferee seizes the goods in the exercise of a right in 6 enforcing a security agreement; 7 (d) the grantor or debtor repossesses the goods in the exercise of 8 a right in enforcing the contract of sale or the lease; 9 (e) any other circumstances prescribed by the regulations. 10 Note: Section 76 deals with the priority of a security interest that reattaches 11 under this section. 12 Perfection of security interest 13 (2) The perfection of the security interest, and the time of registration 14 or perfection of the security interest, are to be determined as if the 15 goods had not been sold or leased, if: 16 (a) the security interest reattaches to the goods under 17 subsection (1); and 18 (b) the security interest was perfected by registration 19 immediately before the time of the acquisition; and 20 (c) the registration is effective at the repossession time. 21 38 Returned collateral--accounts and chattel paper 22 Deemed goods security interest 23 (1) If a sale or lease of goods creates an account or chattel paper, and 24 the account or chattel paper is transferred to another person, the 25 transferee is taken to have a security interest (the deemed goods 26 security interest) in the goods if, at a particular time (the 27 repossession time) the goods come into the possession of the 28 transferor, or of the transferee, in any of the following 29 circumstances: 30 (a) in the case of a sale--the contract of sale is rescinded; 31 (b) in the case of a lease--the lease expires or is rescinded; 32 (c) the transferee seizes the goods in the exercise of a right in 33 enforcing a security agreement; Personal Property Securities Bill 2009 No. , 2009 59
Chapter 2 General rules relating to security interests Part 2.4 Attachment and perfection: specific rules Division 3 Collateral returned to grantor or debtor Section 38 1 (d) the transferor repossesses the goods in the exercise of a right 2 in enforcing the contract of sale or the lease; 3 (e) any other circumstances prescribed by the regulations. 4 Note: Section 76 deals with the priority of a security interest that reattaches 5 under this section. 6 (2) The deemed goods security interest attaches to the goods at the 7 repossession time. 8 Deemed goods security interest temporarily perfected for 5 9 business days 10 (3) If the transferee has a security interest in the account or chattel 11 paper that is perfected by possession or registration at the 12 repossession time, the deemed goods security interest is 13 temporarily perfected for the period starting at the possession time 14 and ending at the end of 5 business days after the day the 15 repossession time occurs. 16 Deemed goods security interest becomes unperfected after 5 17 business days 18 (4) However, the deemed goods security interest becomes unperfected 19 at the end of the period mentioned in subsection (3), unless the 20 deemed goods security interest is perfected otherwise than under 21 subsection (3) before the end of the period. 22 Note: Section 76 deals with the priority of a deemed goods security interest. 23 60 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Attachment and perfection: specific rules Part 2.4 Relocation of collateral or grantor to Australia etc. Division 4 Section 39 1 Division 4--Relocation of collateral or grantor to Australia 2 etc. 3 39 Relocation--main rule 4 Continuous perfection prior to move to Australia 5 (1) A security interest in collateral that has been located in a 6 jurisdiction (the foreign jurisdiction) outside Australia, and is 7 relocated to Australia, is taken to have been continuously perfected 8 for the period covered by subsection (2) if: 9 (a) immediately before the collateral became located in 10 Australia, the collateral was subject to a security interest, in 11 accordance with a security agreement that was enforceable 12 against third parties; and 13 (b) at the time the collateral becomes located in Australia, the 14 collateral continues to be subject to that security interest in 15 accordance with such a security agreement. 16 Note: For when personal property is located in a jurisdiction, see 17 section 235. 18 (2) This subsection covers the period: 19 (a) starting: 20 (i) if the law of the foreign jurisdiction provides for the 21 public registration or recording of the security interest, 22 or a notice relating to the security interest, under law-- 23 when the registration occurs under that law; or 24 (ii) in any other case--when the security interest became 25 effective against third parties under the law of the 26 foreign jurisdiction; and 27 (b) ending when the property becomes located in Australia. 28 Temporary perfection after move to Australia 29 (3) If a security interest in collateral is continuously perfected under 30 subsection (1), the security interest in the collateral is temporarily 31 perfected for the period: 32 (a) starting at the time the property becomes located in Australia; 33 and Personal Property Securities Bill 2009 No. , 2009 61
Chapter 2 General rules relating to security interests Part 2.4 Attachment and perfection: specific rules Division 4 Relocation of collateral or grantor to Australia etc. Section 40 1 (b) ending at the earlier of the following times: 2 (i) the end of 56 days after the day the collateral becomes 3 located in Australia; 4 (ii) the end of 5 business days after the day the secured 5 party has actual knowledge that the collateral has 6 become located in Australia. 7 (4) However, the security interest in the collateral becomes 8 unperfected at the end of the period mentioned in subsection (3), 9 and is taken never to have been temporarily perfected, unless the 10 security interest is perfected otherwise than under subsection (3) 11 before the end of the period. 12 40 Relocation--intangible property and financial property 13 Continuous perfection prior to relocation event 14 (1) If the perfection, and effect of perfection or non-perfection, of a 15 security interest in intangible property, or financial property, has 16 been governed by the law of a foreign jurisdiction, the security 17 interest is taken to have been continuously perfected for the period 18 covered by subsection (2) if: 19 (a) either of the following events (the relocation event) occurs: 20 (i) the grantor becomes located in Australia; 21 (ii) the grantor transfers the collateral to a person who is 22 located in Australia; and 23 (b) as a result of the occurrence of the relocation event, the 24 perfection, and effect of perfection or non-perfection, of the 25 security interest becomes governed by the law of Australia. 26 Note 1: For when personal property is located in a jurisdiction, see 27 section 235. For when bodies corporate, bodies politic or individuals 28 are located in a jurisdiction, see section 235. 29 Note 2: For when laws of other jurisdictions govern a security interest, see 30 Part 7.2. 31 (2) This subsection covers the period: 32 (a) starting: 33 (i) if the law of the foreign jurisdiction provides for the 34 public registration or recording of the security interest, 62 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Attachment and perfection: specific rules Part 2.4 Relocation of collateral or grantor to Australia etc. Division 4 Section 40 1 or a notice relating to the security interest, under law-- 2 when the registration occurs under that law; or 3 (ii) in any other case--when the security interest became 4 effective against third parties under the law of the 5 foreign jurisdiction; and 6 (b) ending when the relocation event occurs. 7 Temporary perfection after relocation event 8 (3) If a security interest in collateral is continuously perfected under 9 subsection (1), the security interest in the collateral is temporarily 10 perfected for the period: 11 (a) starting at the time of the relocation event; and 12 (b) ending at the earlier of the following times: 13 (i) the end of 56 days after the day of the relocation event; 14 (ii) the end of 5 business days after the day the secured 15 party has actual knowledge of the relocation event. 16 (4) However, the security interest in the collateral becomes 17 unperfected at the end of the period mentioned in subsection (3), 18 and is taken never to have been temporarily perfected, unless the 19 security interest is perfected otherwise than under subsection (3) 20 before the end of the period. 21 Exceptions 22 (5) This section does not apply to: 23 (a) intellectual property, an intellectual property licence or an 24 ADI account; or 25 (b) a negotiable instrument. 26 Note: The property mentioned in paragraph (5)(a) is intangible property; 27 negotiable instruments are financial property (see section 10). 28 Personal Property Securities Bill 2009 No. , 2009 63
Chapter 2 General rules relating to security interests Part 2.5 Taking personal property free of security interests Section 41 1 Part 2.5--Taking personal property free of security 2 interests 3 4 41 Guide to this Part 5 This Part is about taking personal property free of security 6 interests. 7 Rules are set out for when personal property may be bought or 8 leased free of a security interest in relation to the following: 9 (a) unperfected security interests; 10 (b) personal, domestic or household property; 11 (c) serial number defects; 12 (d) certain motor vehicles; 13 (e) currency; 14 (f) taking in the ordinary course of business; 15 (g) taking investment interests or entitlements in the 16 ordinary course of trading; 17 (h) investment instruments; 18 (i) investment entitlements. 19 (j) temporarily perfected security interests; 20 If a transferee takes personal property (or an accession) free of a 21 security interest by the operation of this Part, the secured party's 22 rights are subrogated to the rights of the transferor. Payment of the 23 purchase price before the transferee receives notice of subrogation 24 discharges the transferee's obligation (to the extent of the 25 payment). 64 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Taking personal property free of security interests Part 2.5 Section 42 1 42 Application of this Part 2 This Part: 3 (a) applies to a security interest: 4 (i) whether or not the security interest is perfected (except 5 in sections 43 (unperfected interests) and 52 6 (temporarily perfected interests)); and 7 (ii) whether the security interest attaches to personal 8 property as original collateral or as proceeds; and 9 (b) does not apply to the acquisition of an interest in personal 10 property free of a security interest if the interest that is taken 11 is itself a security interest (except in sections 50 (investment 12 instruments) and 51 (investment entitlements)). 13 Note: Some acquisitions to which section 50 applies, and all 14 acquisitions to which section 51 applies, consist of the taking of 15 security interests (see subsections 50(3) and 51(1)). 16 43 Taking personal property free of unperfected security interest 17 Main rule 18 (1) A buyer or lessee of personal property, for new value, takes the 19 personal property free of an unperfected security interest in the 20 property. 21 Exception 22 (2) Subsection (1) does not apply if the unperfected security interest 23 was created or provided for by a transaction to which the buyer or 24 lessee is a party, unless the personal property concerned is of a 25 kind prescribed by the regulations for the purposes of this 26 subsection. 27 44 Taking personal property free of security interest if serial 28 number incorrect or missing 29 Main rule 30 (1) A buyer or lessee of personal property, for new value, takes the 31 personal property free of a security interest in the property if: Personal Property Securities Bill 2009 No. , 2009 65
Chapter 2 General rules relating to security interests Part 2.5 Taking personal property free of security interests Section 45 1 (a) the regulations provide that personal property of that kind 2 may, or must, be described by serial number in a registration; 3 and 4 (b) searching the register, immediately before the time of the sale 5 or lease, by reference only to the serial number of the 6 property, would not disclose a registration that perfected the 7 security interest. 8 Exceptions 9 (2) Subsection (1) does not apply if: 10 (a) the buyer or lessee holds the personal property: 11 (i) as inventory; or 12 (ii) on behalf of a person who would hold the collateral as 13 inventory; or 14 (b) at the time covered by subsection (3), the buyer or lessee has 15 actual knowledge that the sale or lease constitutes a breach of 16 the security agreement that provides for the security interest, 17 unless the personal property is of a kind prescribed by the 18 regulations for the purposes of this subsection. 19 (3) The time covered by this subsection is: 20 (a) if the personal property is bought or leased with the intention 21 of using it predominantly for personal, domestic or household 22 purposes--the time new value is first given for the sale or 23 lease; or 24 (b) in any other case--the time of sale or of entry into agreement 25 for the lease. 26 45 Taking motor vehicles free of security interest 27 Incorrect or missing serial number 28 (1) A buyer or lessee, for new value, of a motor vehicle of a kind 29 prescribed by the regulations for the purpose of this section, takes 30 the motor vehicle free of a security interest in the motor vehicle if: 31 (a) the regulations provide that motor vehicles of that kind may, 32 or must, be described by serial number; and 33 (b) there is a time during the period between the start of the 34 previous day and the time of the sale or lease by reference to 66 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Taking personal property free of security interests Part 2.5 Section 45 1 which a search of the register (by reference otherwise only to 2 the serial number of the motor vehicle) would not disclose a 3 registration that perfected the security interest; and 4 (c) the seller or lessor is: 5 (i) the person who granted the security interest; or 6 (ii) if the person who granted the security interest has lost 7 the right to possess the motor vehicle, or is estopped 8 from asserting an interest in the motor vehicle--another 9 person who is in possession of the motor vehicle. 10 (2) Subsection (1) does not apply if: 11 (a) the secured party is in possession of the motor vehicle 12 immediately before the time of the sale or lease; or 13 (b) the motor vehicle is bought at a sale held by or on behalf of 14 an execution creditor; or 15 (c) the buyer or lessee holds the motor vehicle: 16 (i) as inventory; or 17 (ii) on behalf of a person who would hold the motor vehicle 18 as inventory; or 19 (d) the buyer or lessee buys or leases the motor vehicle with 20 actual or constructive knowledge of the security interest. 21 Taking from prescribed persons 22 (3) A buyer or lessee, for new value, of a motor vehicle of a kind 23 prescribed by the regulations for the purpose of this section takes 24 the motor vehicle free of a security interest in the motor vehicle if: 25 (a) the regulations provide that motor vehicles of that kind may, 26 or must, be described by serial number; and 27 (b) the seller or lessor is in a class of persons prescribed by the 28 regulations for the purposes of this subsection. 29 (4) Subsection (3) does not apply if: 30 (a) the secured party is in possession of the motor vehicle 31 immediately before the time of the sale or lease; or 32 (b) the motor vehicle is bought at a sale held by or on behalf of 33 an execution creditor; or 34 (c) the buyer or lessee holds the motor vehicle: 35 (i) as inventory; or Personal Property Securities Bill 2009 No. , 2009 67
Chapter 2 General rules relating to security interests Part 2.5 Taking personal property free of security interests Section 46 1 (ii) on behalf of a person who would hold the motor vehicle 2 as inventory; or 3 (d) the buyer or lessee buys or leases the motor vehicle with 4 actual or constructive knowledge that the sale or lease 5 constitutes a breach of the security agreement that provides 6 for the security interest. 7 46 Taking personal property free of security interest in ordinary 8 course of business 9 Main rule 10 (1) A buyer or lessee of personal property takes the personal property 11 free of a security interest given by the seller or lessor, or that arises 12 under section 32 (proceeds--attachment), if the personal property 13 was sold or leased in the ordinary course of the seller's or lessor's 14 business of selling or leasing personal property of that kind. 15 Exceptions 16 (2) Subsection (1) does not apply if: 17 (a) in a case in which personal property of that kind may, or 18 must, be described by serial number--the buyer or lessee 19 holds the personal property: 20 (i) as inventory; or 21 (ii) on behalf of a person who would hold the collateral as 22 inventory; or 23 (b) in any case--the buyer or lessee buys or leases the personal 24 property with actual knowledge that the sale or lease 25 constitutes a breach of the security agreement that provides 26 for the security interest. 27 47 Taking personal, domestic or household property free of security 28 interest 29 Main rule 30 (1) A buyer or lessee of personal property, for new value, that the 31 buyer or lessee intends (at the time of purchase or lease) to use 32 predominantly for personal, domestic or household purposes takes 68 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Taking personal property free of security interests Part 2.5 Section 48 1 the personal property free of a security interest in the property if 2 the market value (worked out at the time each part of the total new 3 value is given) of the total new value given for the personal 4 property is not more than: 5 (a) $5,000; or 6 (b) if a greater amount has been prescribed by regulations for the 7 purposes of this subsection--that amount. 8 Exceptions 9 (2) Subsection (1) does not apply if: 10 (a) the personal property is of a kind that the regulations provide 11 may, or must, be described by serial number in a registration; 12 or 13 (b) the buyer or lessee buys or leases the personal property with 14 actual or constructive knowledge that the sale or lease 15 constitutes a breach of the security agreement that provides 16 for the security interest; or 17 (c) at the time the contract or agreement providing for the sale or 18 lease is entered into, the buyer or lessee believes, and it is 19 actually the case, that the market value of the personal 20 property is more than: 21 (i) $5,000; or 22 (ii) if a greater amount has been prescribed by regulations 23 for the purposes of this paragraph--that amount. 24 48 Taking currency free of security interest 25 A holder of currency takes the currency free of a security interest 26 in the currency if the holder acquires the currency with no actual or 27 constructive knowledge of the security interest. 28 49 Taking investment interest or entitlement free of security interest 29 in the ordinary course of trading 30 A person who buys an investment instrument or an investment 31 entitlement in the ordinary course of trading on a prescribed 32 financial market (within the meaning of the Corporations Act 33 2001) takes the instrument or entitlement free of a security interest 34 in the instrument or entitlement. Personal Property Securities Bill 2009 No. , 2009 69
Chapter 2 General rules relating to security interests Part 2.5 Taking personal property free of security interests Section 50 1 50 Taking investment instrument free of security interest 2 Main rule 3 (1) A purchaser (see subsection (3)) of an investment instrument, other 4 than a secured party, takes the instrument free of a security interest 5 in the instrument if: 6 (a) the purchaser gives value for the instrument; and 7 (b) the purchaser takes possession or control of the instrument. 8 Exception 9 (2) Subsection (1) does not apply if the purchaser takes the instrument 10 with actual or constructive knowledge that the taking constitutes a 11 breach of the security agreement that provides for the security 12 interest. 13 (3) In this section: 14 purchaser, in relation to an investment instrument, means a person 15 who takes the instrument by sale, lease, discount, assignment, 16 negotiation, mortgage, pledge, lien, issue, reissue or any other 17 consensual transaction that creates an interest in personal property. 18 51 Taking investment entitlement free of security interest 19 Main rule 20 (1) A person (the transferee) who takes an interest in an investment 21 entitlement takes the interest free of a security interest in the 22 entitlement if: 23 (a) the transferee gives value for the interest (unless the interest 24 acquired is itself a security interest); and 25 (b) the credit of the interest in the financial product in relation to 26 which the investment entitlement arises is made in 27 accordance with a consensual transaction. 28 Exception 29 (2) Subsection (1) does not apply if, at the time the interest is taken, 30 the person in whose name an investment entitlement intermediary 70 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Taking personal property free of security interests Part 2.5 Section 52 1 maintains the investment entitlement account has actual or 2 constructive knowledge that crediting the interest in the financial 3 product to the account constitutes a breach of a security agreement 4 that provides for a security interest in any investment entitlement 5 or financial product. 6 52 Taking personal property free of temporarily perfected security 7 interest 8 Main rule 9 (1) A buyer or lessee, for new value, of the proceeds of personal 10 property, or of goods or a negotiable document of title, takes the 11 proceeds, goods or document free of a security interest that is 12 temporarily perfected by force of this Act (other than section 322) 13 immediately before the time of the sale or lease, if the security 14 interest is not otherwise perfected at that time. 15 Note: Section 322 provides temporary perfection for certain transitional 16 security interests. 17 Exception 18 (2) Subsection (1) does not apply if the buyer or lessee has actual 19 knowledge that the sale or lease constitutes a breach of the security 20 agreement that provides for the security interest at: 21 (a) the time new value is first given for the sale or lease, if the 22 personal property is bought or leased with the intention of 23 using it predominantly for personal, domestic or household 24 purposes; or 25 (b) in any other case--the time of sale or of entry into agreement 26 for the lease. 27 53 Rights of secured party and transferee on taking personal 28 property free of security interest 29 Scope 30 (1) This section applies if: 31 (a) a person (the transferee) acquires personal property from 32 another person (the transferor); and Personal Property Securities Bill 2009 No. , 2009 71
Chapter 2 General rules relating to security interests Part 2.5 Taking personal property free of security interests Section 53 1 (b) as a result, the transferee takes the personal property, or an 2 accession to the property, free of a secured party's security 3 interest because of the operation of this Part. 4 Rights of secured party 5 (2) The rights of the secured party are subrogated, in relation to the 6 property, to the rights (if any) of the transferor and any predecessor 7 of the transferor (including the right to receive any part of the 8 purchase price for the property which has not been paid). 9 Rights of transferee 10 (3) If a person who is liable to pay the purchase price of personal 11 property makes a payment before receiving notice of a secured 12 party's right under subsection (2), the payment discharges the 13 obligation of the person to the extent of the payment. 14 72 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Introduction Division 1 Section 54 1 Part 2.6--Priority between security interests 2 Division 1--Introduction 3 54 Guide to this Part 4 This Part deals with how to work out the priority between 5 competing security interests in collateral (and in some cases, other 6 kinds of interests). 7 Priority rules are relevant when the same personal property is 8 subject to 2 or more security interests. If the debtor defaults, the 9 rules determine the order of priority in which the various secured 10 parties can enforce their security interests under Chapter 4. 11 Division 2 sets out the default rules that apply if this Act provides 12 no other way of determining that priority. 13 Unless otherwise provided: 14 (a) perfected interests have priority over unperfected 15 interests; and 16 (b) priority between perfected interests amongst 17 themselves, and unperfected interests amongst 18 themselves, is determined on a first-in-time basis. 19 The Division contains other rules of general application (such as 20 the priority that applies to the proceeds of collateral). Security 21 interests perfected by control have the highest priority. 22 Division 3 deals with the priority rules that apply when one of the 23 security interests is a perfected purchase money security interest. 24 These interests are exceptions to the first-in-time rule (except for 25 certain security interests in an account dealt with in section 64). A 26 perfected purchase money security interest that is granted to a 27 seller, lessor or consignor takes priority over a perfected purchase 28 money security interest that is granted to others. Personal Property Securities Bill 2009 No. , 2009 73
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 1 Introduction Section 54 1 Division 4 deals with priority of security interests in transferred 2 collateral where a transferor and a transferee have both granted 3 security interests in the transferred collateral. Provided the 4 transferor-granted security interest has remained perfected, that 5 security interest will take priority. 6 Division 5 deals with the priority of certain creditors who have 7 their debts repaid. The priority of those who purchase negotiable 8 instruments, chattel paper and negotiable documents of title is also 9 dealt with. Generally, the purchaser's interest will take priority 10 over a security interest in the negotiable instrument, chattel paper 11 or negotiable document of title. 12 Division 6 deals with priority between other kinds of interests 13 (such as interests that arise under law, interests of execution 14 creditors and security interests held by ADIs). 15 74 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of security interests generally Division 2 Section 55 1 Division 2--Priority of security interests generally 2 55 Default priority rules 3 (1) This section sets out the priority between security interests in the 4 same collateral if this Act provides no other way of determining 5 that priority. 6 Note: For other rules about priorities, see the following: 7 (a) the remaining provisions of this Part; 8 (b) Chapter 3 (agricultural interests, accessions and commingling); 9 (c) Part 9.4 (transitional application of this Act). 10 Priority between unperfected security interests 11 (2) Priority between unperfected security interests in the same 12 collateral is to be determined by the order of attachment of the 13 security interests. 14 Perfected security interest has priority over unperfected security 15 interest 16 (3) A perfected security interest in collateral has priority over an 17 unperfected security interest in the same collateral. 18 Priority for perfection in other ways 19 (4) Priority between 2 or more security interests in collateral that are 20 currently perfected is to be determined by the order in which the 21 priority time (see subsection (5)) for each security interest occurs. 22 (5) For the purposes of subsection (4), the priority time for a security 23 interest in collateral is, subject to subsection (6), the earliest of the 24 following times to occur in relation to the security interest: 25 (a) the registration time for the collateral; 26 (b) the time the secured party, or another person on behalf of the 27 secured party, first takes possession of the collateral; 28 (c) the time the security interest is temporarily perfected, or 29 otherwise perfected, by force of this Act. Personal Property Securities Bill 2009 No. , 2009 75
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 2 Priority of security interests generally Section 56 1 (6) A time is a priority time for a security interest only if, once the 2 security interest is perfected at or after that time, the security 3 interest remains continuously perfected. 4 Note: A security interest in the proceeds of original collateral has the same 5 default priority as the security interest in the original collateral (see 6 subsection 33(5)). 7 56 How a security interest is continuously perfected 8 (1) For the purposes of this Act, a security interest is continuously 9 perfected after a particular time if the security interest is, after that 10 time, perfected under this Act at all times. 11 (2) A security interest may be continuously perfected after a particular 12 time even if, after that time, it is perfected in 2 or more different 13 ways: 14 (a) at any particular time; or 15 (b) at different times. 16 Examples: A security interest could be perfected in 2 or more different ways as 17 follows: 18 (a) by possession and by a registration; 19 (b) by 2 different registrations. 20 57 Priority of security interests perfected by control 21 Priority interests 22 (1) A security interest in collateral that is currently perfected by 23 control has priority over a security interest in the same collateral 24 that is currently perfected by another means. 25 Note: Only security interests in certain kinds of property can be perfected by 26 control (see paragraph 21(2)(c) and Part 2.3). 27 (2) Priority between 2 or more security interests in collateral that are 28 currently perfected by control is to be determined by the order in 29 which the interests were perfected by control (where the perfection 30 by control has been continuous). 76 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of security interests generally Division 2 Section 58 1 Control priority takes precedence over any other priority rule 2 (3) This section applies despite the application of any other provision 3 of this Part. 4 58 Priority of advances 5 A security interest provided for by a security agreement has the 6 same priority in respect of all advances (including future 7 advances), and the performance of all obligations, secured by the 8 agreement. 9 Note: This section is subject to section 68 (transfer of collateral that is not 10 registered with a serial number). 11 59 Priority rules and intervening security interests 12 A security interest (the first security interest) has priority over 13 another security interest (the last security interest) if, by the 14 operation of this Act (including this section): 15 (a) the first security interest has priority over security interests of 16 a particular kind (the intermediate security interests); and 17 (b) the intermediate security interests have priority over the last 18 security interest. 19 60 Transfer of security interests does not affect priority 20 If a security interest in collateral is transferred, the transferred 21 interest has the same priority immediately after the transfer as it 22 had immediately before the transfer. 23 Note: Division 4 deals with transfer of collateral. 24 61 Voluntary subordination of security interests 25 (1) A secured party may (in a security agreement or otherwise) 26 subordinate the secured party's security interest in collateral to any 27 other interest in the collateral. 28 (2) An agreement to subordinate a security interest: 29 (a) is effective according to its terms between the parties; and Personal Property Securities Bill 2009 No. , 2009 77
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 2 Priority of security interests generally Section 61 1 (b) may be enforced by a third party if the third party is the 2 person, or one of a class of persons, for whose benefit the 3 agreement is intended. 4 78 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of purchase money security interests Division 3 Section 62 1 Division 3--Priority of purchase money security interests 2 62 When purchase money security interests take priority over other 3 security interests 4 Scope 5 (1) This section sets out when a perfected purchase money security 6 interest that is granted by a grantor in collateral or its proceeds has 7 priority over a perfected security interest that is granted by the 8 same grantor in the same collateral, but that is not a purchase 9 money security interest. 10 Note: This section is subject to section 57 (perfection by control). 11 Inventory 12 (2) The purchase money security interest has priority if: 13 (a) the purchase money security interest is in inventory or its 14 proceeds; and 15 (b) the purchase money security interest is perfected by 16 registration at the time: 17 (i) for inventory that is goods--the grantor, or another 18 person at the request of the grantor, obtains possession 19 of the inventory; or 20 (ii) for any other kind of inventory--the purchase money 21 security interest attaches to the inventory; and 22 (c) the registration that perfects the purchase money security 23 interest states, in accordance with item 7 of the table in 24 section 153, that the interest is a purchase money security 25 interest. 26 Note: This subsection is subject to sections 64 (non-purchase money security 27 interest in accounts) and 71 (chattel paper). 28 Personal property other than inventory 29 (3) The purchase money security interest has priority if: 30 (a) the interest is in personal property, or its proceeds, other than 31 inventory; and Personal Property Securities Bill 2009 No. , 2009 79
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 3 Priority of purchase money security interests Section 63 1 (b) the purchase money security interest is perfected by 2 registration before the end of 10 business days after 3 whichever of the following days applies: 4 (i) for goods--the day the grantor, or another person at the 5 request of the grantor, obtains possession of the 6 property; 7 (ii) for any other property--the day the interest attaches to 8 the property; and 9 (c) the registration that perfects the purchase money security 10 interest states, in accordance with item 7 of the table in 11 section 153, that the interest is a purchase money security 12 interest. 13 Note: The period mentioned in paragraph (b) may be extended by a court 14 under section 293. 15 63 Priority between competing purchase money security interests in 16 collateral 17 A perfected purchase money security interest (the priority interest) 18 that is granted by a grantor in collateral or its proceeds to a seller, 19 lessor or consignor of the collateral has priority over any other 20 perfected purchase money security interest that is granted by the 21 same grantor in the same collateral if the priority interest is 22 perfected: 23 (a) if the collateral is inventory that is goods--at the time the 24 grantor, or another person at the request of the grantor, 25 obtains possession of the collateral; or 26 (b) if the collateral is inventory and is not goods--at the time the 27 priority interest attaches to the collateral; or 28 (c) if the collateral is not inventory, and is goods--before the 29 end of 10 business days after the day the grantor, or another 30 person at the request of the grantor, obtains possession of the 31 collateral; or 32 (d) if the collateral is not inventory, and is not goods--before the 33 end of 10 business days after the day the priority interest 34 attaches to the collateral. 35 Note 1: This section is subject to section 57 (perfection by control). 36 Note 2: The periods mentioned in paragraphs (c) and (d) may be extended by a 37 court under section 293. 80 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of purchase money security interests Division 3 Section 64 1 64 Non-purchase money security interests in accounts 2 Non-purchase money security interest in account as original 3 collateral has priority over purchase money security interest in 4 account as proceeds of inventory 5 (1) Despite subsection 62(2), a non-purchase money security interest 6 (the priority interest) granted for new value in an account as 7 original collateral and perfected by registration has priority over a 8 perfected purchase money security interest that is granted by the 9 same grantor in the account as proceeds of inventory, if: 10 (a) the registration time in respect of the priority interest occurs 11 before the earlier of the following times: 12 (i) the time at which the purchase money security interest 13 is perfected; 14 (ii) the registration time in respect of the purchase money 15 security interest; or 16 (b) both of the following conditions are met: 17 (i) the secured party holding the priority interest gives a 18 notice in accordance with subsection (2) to each secured 19 party holding a purchase money security interest in the 20 account in respect of which a registration is effective at 21 the time the priority interest is perfected by registration; 22 (ii) the notice is given at least 5 business days before the 23 earlier of the day on which the registration time for the 24 account occurs and the day the priority interest attaches 25 to the account. 26 Note 1: This section is subject to sections 57 (perfection by control) and 71 27 (chattel paper). 28 Note 2: The period mentioned in paragraph (b) may be extended by a court 29 under section 293. 30 (2) A notice is given in accordance with this subsection if: 31 (a) the notice is in the approved form; or 32 (b) the notice: 33 (i) contains a description of the inventory to which the 34 notice relates; and 35 (ii) sets out the effect of subsection (1). Personal Property Securities Bill 2009 No. , 2009 81
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 3 Priority of purchase money security interests Section 65 1 Perfected purchase money security interest in both proceeds and 2 new value 3 (3) If a person has a purchase money security interest in an account as 4 proceeds of inventory that is subordinate to a non-purchase money 5 security interest under subsection (1): 6 (a) the person is taken to have a purchase money security interest 7 in both the proceeds of the inventory and in the new value 8 mentioned in subsection (1); and 9 (b) the purchase money security interest in the new value is 10 taken to be perfected by the registration that perfected the 11 purchase money security interest in the proceeds. 12 65 Possession of goods shipped by a common carrier 13 For the purposes of this Division, if goods are shipped by common 14 carrier to a grantor, or to a person designated by the grantor, the 15 grantor does not obtain possession of the goods until the grantor, or 16 a third party at the request of the grantor, obtains actual possession 17 of the goods or a document of title to the goods, whichever is 18 earlier. 19 82 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of security interests in transferred collateral Division 4 Section 66 1 Division 4--Priority of security interests in transferred 2 collateral 3 66 Application of this Division 4 (1) This Division sets out the priority between 2 security interests (a 5 transferor-granted interest and a transferee-granted interest) if: 6 (a) a grantor transfers collateral (the transferred collateral) to a 7 transferee; and 8 (b) immediately before the transfer, a security interest (the 9 transferor-granted interest) is attached to the collateral; and 10 (c) the transferee grants (whether before or after the transfer) a 11 security interest (the transferee-granted interest) in the 12 transferred collateral; and 13 (d) neither the transferor-granted interest nor the 14 transferee-granted interest is currently perfected by control. 15 Note 1: If either or both of the interests are currently perfected by control 16 under paragraph 21(2)(c), section 57 applies. 17 Note 2: If the priority between a transferor-granted interest and a 18 transferee-granted interest is not covered by this section, then 19 section 55 applies. 20 Note 3: For attachment and perfection in relation to transferred collateral, see 21 section 34. 22 Note 4: For a grantor's rights in relation to transferring collateral, see 23 section 79. 24 (2) This Division does not prevent a secured party from perfecting a 25 security interest in any way in order to have priority over another 26 security interest. 27 67 Priority when transferor-granted interest has been continuously 28 perfected 29 The transferor-granted interest has priority if: 30 (a) it was perfected immediately before the transfer; and 31 (b) it has been continuously perfected since the transfer. Personal Property Securities Bill 2009 No. , 2009 83
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 4 Priority of security interests in transferred collateral Section 68 1 68 Priority when there is a break in the perfection of the 2 transferor-granted interest 3 (1) The transferor-granted interest in the transferred collateral has 4 priority (except as mentioned in subsection (2)) if: 5 (a) the transferred collateral is not registered with a serial 6 number (see subsection (4)); and 7 (b) the interest was perfected by registration immediately before 8 the transfer; and 9 (c) the interest becomes unperfected; and 10 Note: See subsection 34(3) for one situation in which a security interest 11 may become unperfected following a transfer of collateral. 12 (d) the interest is later re-perfected; and 13 (e) a notice is given (whether before or after the interest is 14 re-perfected as mentioned in paragraph (d)) to all other 15 secured parties who have a registration that describes the 16 transferred collateral; and 17 (f) the notice is given in accordance with subsection (5); and 18 (g) the interest has been continuously perfected since it was 19 re-perfected as mentioned in paragraph (d). 20 (2) However, the transferee-granted interest has priority if: 21 (a) subsection (1) applies in relation to the transferor-granted 22 interest; and 23 (b) the transferee-granted interest is perfected immediately 24 before the transferor-granted security is re-perfected as 25 mentioned in paragraph (1)(d); and 26 (c) the transferee acquires the transferee-granted interest without 27 actual or constructive knowledge that the acquisition 28 constitutes a breach of the security agreement that provides 29 for the transferor-granted interest; and 30 (d) the transferee-granted interest secures performance of an 31 advance made, or an obligation incurred, by the transferee's 32 secured party before: 33 (i) the transferor-granted interest is re-perfected as 34 mentioned in paragraph (1)(d); and 35 (ii) the notice is given under paragraph (1)(e); 36 but only to the extent of the advance or obligation. 84 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of security interests in transferred collateral Division 4 Section 68 1 (3) Subsection (2) applies despite section 58 (priority of advances). 2 (4) For the purposes of this section, the transferred collateral is 3 registered with a serial number at a particular time only if a search 4 of the register by reference to that time and by reference only to the 5 serial number of the collateral is capable of disclosing the 6 registration. 7 (5) A notice is given in accordance with this subsection if: 8 (a) the notice is in the approved form; or 9 (b) the notice: 10 (i) states that the secured party expects to perfect a security 11 interest in the transferred collateral; and 12 (ii) contains a description of the transferred collateral; and 13 (iii) sets out the effect of subsections (1) and (2). 14 Personal Property Securities Bill 2009 No. , 2009 85
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 5 Priority of creditors, and purchasers of negotiable instruments, chattel paper and negotiable documents of title Section 69 1 Division 5--Priority of creditors, and purchasers of 2 negotiable instruments, chattel paper and 3 negotiable documents of title 4 69 Priority of creditor who receives payment of debt 5 (1) The interest of a creditor who receives payment of a debt owing by 6 a debtor through a payment covered by subsection (3) has priority 7 over a security interest (whether perfected or unperfected) in: 8 (a) the funds paid; and 9 (b) the intangible that was the source of the payment; and 10 (c) a negotiable instrument used to effect the payment. 11 Example: A bank account from which the funds were paid is an example of an 12 intangible that was the source of the payment. 13 (2) Subsection (1) does not apply if, at the time of the payment, the 14 creditor had actual knowledge that the payment was made in 15 breach of the security agreement that provides for the security 16 interest. 17 (3) Payments made by a debtor are covered by this subsection if they 18 are made through the use of: 19 (a) an electronic funds transfer; or 20 (b) a debit, transfer order, authorisation, or similar written 21 payment mechanism executed by the debtor when the 22 payment was made; or 23 (c) a negotiable instrument. 24 70 Priority of person who acquires a negotiable instrument or an 25 interest in a negotiable instrument 26 (1) This section applies if, by a consensual transaction, a person 27 acquires an interest consisting of: 28 (a) a negotiable instrument; or 29 (b) an interest in a negotiable instrument. 30 (2) The interest of the person in the negotiable instrument has priority 31 over a perfected security interest in the negotiable instrument if: 32 (a) the person gave value for the interest; and 86 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of creditors, and purchasers of negotiable instruments, chattel paper and negotiable documents of title Division 5 Section 71 1 (b) the person: 2 (i) in the case of a person who acquired the interest in the 3 ordinary course of the person's business of acquiring 4 interests of that kind--acquired the interest without 5 actual or constructive knowledge that the acquisition 6 constitutes a breach of the security agreement that 7 provides for the security interest; or 8 (ii) otherwise--acquired the interest without actual or 9 constructive knowledge of the security interest; and 10 (c) the person took possession or control of the negotiable 11 instrument. 12 71 Priority of person who acquires chattel paper or an interest in 13 chattel paper 14 (1) This section applies if: 15 (a) a person acquires an interest consisting of: 16 (i) chattel paper; or 17 (ii) an interest in chattel paper; and 18 (b) the interest is acquired: 19 (i) by a consensual transaction; and 20 (ii) in the ordinary course of the person's business of 21 acquiring interests of that kind; and 22 (iii) for new value. 23 Note: For rights relating to the assignment of chattel paper, see section 80. 24 (2) The interest of the person in the chattel paper has priority over the 25 following security interests in the chattel paper: 26 (a) if the person took possession of the chattel paper without 27 actual or constructive knowledge of a perfected security 28 interest in the chattel paper--the perfected security interest; 29 (b) in any case--a security interest that has attached to proceeds 30 of inventory as original collateral. 31 (3) This section applies despite sections 62 and 64. Personal Property Securities Bill 2009 No. , 2009 87
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 5 Priority of creditors, and purchasers of negotiable instruments, chattel paper and negotiable documents of title Section 72 1 72 Priority of holder of negotiable document of title 2 The interest of a holder of a negotiable document of title has 3 priority over a perfected security interest in the document of title if: 4 (a) the holder gave value for the document of title; and 5 (b) the holder: 6 (i) in the case of a holder who acquired the document of 7 title in the ordinary course of the holder's business of 8 acquiring documents of title of that kind--acquired the 9 interest without actual or constructive knowledge that 10 the acquisition constitutes a breach of the security 11 agreement that provides for the security interest; or 12 (ii) otherwise--acquired the negotiable instrument without 13 actual or constructive knowledge of the security interest. 14 88 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of other interests Division 6 Section 73 1 Division 6--Priority of other interests 2 73 Priority between security interests and declared statutory 3 interests 4 Interests arising under a law etc. in the ordinary course of business 5 (1) An interest (the priority interest) in collateral has priority over a 6 security interest in the collateral if: 7 (a) the priority interest arises (by being created, arising or being 8 provided for): 9 (i) under a law of the Commonwealth, a State or a 10 Territory, unless the person who owns the collateral in 11 which the priority interest is granted agrees to the 12 interest; or 13 (ii) by operation of the general law; and 14 (b) the priority interest arises in relation to providing goods or 15 services in the ordinary course of business; and 16 (c) the person who holds the priority interest provided those 17 goods or services; and 18 (d) no law of the Commonwealth, a State or a Territory provides 19 for the priority between the priority interest and the security 20 interest; and 21 Example: A law of the Commonwealth, a State or a Territory to which 22 subsection (2) applies is a law that provides for the priority 23 between the priority interest and the security interest. 24 (e) the person who holds the priority interest acquired the 25 interest without actual knowledge that the acquisition 26 constitutes a breach of the security agreement that provides 27 for the security interest. 28 Note: The priority interest might be an interest to which this Act would 29 otherwise not apply (see subsection 8(2)). 30 Statutory interests declared by law 31 (2) The priority between an interest in collateral (the statutory 32 interest) that arises, by being created, arising or being provided for, 33 under a law of the Commonwealth, a State or a Territory (the Personal Property Securities Bill 2009 No. , 2009 89
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 6 Priority of other interests Section 74 1 relevant jurisdiction) and a security interest in the same collateral 2 is to be determined in accordance with that law if, and only if: 3 (a) that law declares that this subsection applies to statutory 4 interests of that kind; and 5 (b) the statutory interest arises after the declaration comes into 6 effect. 7 Note: The statutory interest might be an interest to which this Act would 8 otherwise not apply (see subsection 8(2)). 9 (3) However, for the purposes of subsection (2), as it applies to a law 10 of the Commonwealth: 11 (a) the Minister may, by an instrument made under 12 subsection (4), make the declaration required by 13 paragraph (2)(a); and 14 (b) the priority mentioned in subsection (2) may be determined 15 in accordance with that instrument. 16 (4) The Minister may make a legislative instrument containing a 17 declaration, or determining priority, or both, for the purposes of 18 subsection (3). 19 (5) Subsection (2) is subject to subsection (1). 20 Rights to payment in connection with specifically identified land 21 (6) An interest (the priority interest) in collateral has priority over a 22 security interest in the collateral if the priority interest is an interest 23 of a kind mentioned in subparagraph 8(1)(f)(ii) (certain rights to 24 payment in respect of land). 25 Note: This section does not apply to priorities in relation to interests that 26 arise before the registration commencement time (within the meaning 27 of section 306). Priorities in relation to such interests are unaffected 28 by this Act (see section 312). 29 74 Execution creditor has priority over unperfected security interest 30 (1) The interest of an execution creditor in collateral has priority over 31 any security interest in the same collateral that is not perfected at 32 the time covered by subsection (4) (even if such a security interest 33 is later perfected). 90 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of other interests Division 6 Section 75 1 (2) To avoid doubt, an execution creditor does not include a landlord 2 who exercises a right of distress. 3 (3) This section applies despite any other section in this Part. 4 Time of seizure or execution 5 (4) This subsection covers the following times: 6 (a) if the collateral is seized by the execution creditor or by 7 another person on behalf of the execution creditor--the time 8 of seizure; 9 (b) in any other case--the time when: 10 (i) an order is made by a court in respect of a judgment in 11 relation to the execution creditor; or 12 (ii) a garnishee order is made in relation to the execution 13 creditor. 14 75 Priority of security interests held by ADIs 15 A perfected security interest, held by an ADI, in an ADI account 16 with the ADI has priority over any other perfected security interest 17 in the ADI account, other than a security interest that is perfected 18 by control in accordance with subparagraph 25(1)(a)(ii). 19 Note 1: A security interest that is held by an ADI in an ADI account is 20 perfected by control (see subparagraph 25(1)(a)(i)). 21 Note 2: This provision does not affect any right of set-off the grantor might 22 have in relation to the account (see paragraph 8(1)(d)). 23 76 Priority of security interests in returned goods 24 Security interest held by account transferee 25 (1) A perfected security interest in goods that has reattached to the 26 property under subsection 37(1) has priority over a security interest 27 in the goods that is granted by the operation of subsection 38(1) to 28 a transferee of an account. 29 Note: Section 37 deals with security interests that reattach when goods are 30 returned. Section 38 provides for a security interest in an account or 31 chattel paper to arise automatically when goods are returned. Personal Property Securities Bill 2009 No. , 2009 91
Chapter 2 General rules relating to security interests Part 2.6 Priority between security interests Division 6 Priority of other interests Section 77 1 (2) A security interest in goods that is granted by the operation of 2 subsection 38(2) to a transferee of chattel paper has priority over 3 the following perfected security interests: 4 (a) a perfected security interest in the goods that is granted by 5 the operation of subsection 38(2) to a transferee of an 6 account; 7 (b) if the transferee takes possession of the chattel paper in the 8 ordinary course of business of acquiring chattel paper of that 9 kind and for new value: 10 (i) a perfected security interest in the goods that has 11 reattached under subsection 37(1); or 12 (ii) a perfected security interest in the goods as 13 after-acquired property that attaches when the goods 14 come into the possession of the grantor or transferee in 15 the circumstances mentioned in paragraph 37(1)(d). 16 Security interest granted by buyer or lessee 17 (3) A security interest (the priority interest) in goods that is granted by 18 a person who acquires an interest in the property has priority over a 19 security interest in the goods that reattaches under section 37, or is 20 granted by the operation of section 38, if: 21 (a) the priority interest attaches while the goods are in the 22 possession of the person; and 23 (b) immediately before the repossession time (referred to in 24 paragraph 37(1)(d) or 38(1)(d)), the priority interest is 25 perfected. 26 77 Priority of certain security interests if there is no foreign register 27 Scope 28 (1) This section applies to a security interest (the priority interest) in 29 an account or financial property if the law of the jurisdiction that 30 governs the perfection, and the effect of perfection or 31 non-perfection, of the priority interest does not provide for the 32 public registration or recording of the priority interest, or a notice 33 relating to the priority interest. 34 Note: For when laws of other jurisdictions govern a security interest, see 35 Part 7.2. 92 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Priority between security interests Part 2.6 Priority of other interests Division 6 Section 77 1 Security interests in accounts 2 (2) A priority interest in an account has priority, in proceedings in an 3 Australian court, over another interest in the account (whether or 4 not the other interest is a security interest) if the priority interest is 5 perfected by registration under this Act before the other interest 6 attaches to the account. 7 Security interests in financial property 8 (3) A priority interest in financial property has priority, in proceedings 9 in an Australian court, over another interest in the financial 10 property (whether or not the other interest is a security interest) if: 11 (a) the priority interest is perfected by registration under this Act 12 before the other interest attaches to the property; and 13 (b) when the other interest arises in the property: 14 (i) the property is located in Australia; and 15 (ii) the secured party does not have possession or control of 16 the property. 17 Note: For when personal property is located in a jurisdiction, see 18 section 235. 19 Relationship with sections 239 and 240 20 (4) Subsections (2) and (3) apply in proceedings in an Australian court 21 even if the law of another jurisdiction applies in the proceedings in 22 relation to a security interest in an account or financial property 23 under subsection 239(2) or 240(3). 24 Personal Property Securities Bill 2009 No. , 2009 93
Chapter 2 General rules relating to security interests Part 2.7 Transfer and assignment of interest in collateral Section 78 1 Part 2.7--Transfer and assignment of interest in 2 collateral 3 4 78 Guide to this Part 5 This Part deals with the transfer and assignment of interests in 6 collateral. 7 Collateral may be transferred despite a contrary provision in a 8 security agreement (or a provision declaring the transfer to be a 9 default), if the grantor and transferee consent, or by the operation 10 of law. 11 The rights of a transferee of an account or chattel paper are subject 12 to the contract between the account debtor and the transferor, and 13 certain general law claims the account debtor may have against the 14 transferor. 15 A modification of the contract (or a substituted contract) between 16 the account debtor and the transferor is effective against the 17 transferee except in certain situations (dishonesty, commercial 18 unreasonableness or adverse effects on the transferee's rights or the 19 transferor's ability to perform the contract). 20 A term in a contract between an account debtor and a transferor 21 that imposes certain restrictions on the transfer of an account or 22 chattel paper binds the transferor to the extent of making the 23 transferor liable in damages for breach of contract, but is 24 unenforceable against third parties. 25 79 Transfer of collateral despite prohibition in security agreement 26 (1) If collateral would be able to be transferred (including by sale, by 27 creating a security interest or under proceedings to enforce a 28 judgment) but for a provision in an agreement (whether or not a 29 security agreement) prohibiting the transfer or declaring the 30 transfer to be a default, the collateral may be transferred, despite 31 the provision: 94 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Transfer and assignment of interest in collateral Part 2.7 Section 80 1 (a) by consent between the grantor and the transferee; or 2 (b) by operation of law. 3 Note: See section 32 in relation to security interests in proceeds that arise as 4 a result of a transfer. 5 (2) A transfer mentioned in subsection (1) does not prejudice the rights 6 of the secured party under the security agreement or otherwise, 7 including the right to treat a prohibited transfer as an act of default. 8 80 Rights on transfer of account or chattel paper--rights of 9 transferee and account debtor 10 Rights of transferee subject to contractual terms and defences 11 (1) The rights of a transferee of an account or chattel paper (including 12 a secured party or a receiver) are subject to: 13 (a) the terms of the contract between the account debtor and the 14 transferor, and any equity, defence, remedy or claim arising 15 in relation to the contract (including a defence by way of a 16 right of set-off); and 17 (b) any other equity, defence, remedy or claim of the account 18 debtor against the transferor (including a defence by way of a 19 right of set-off) that accrues before the first time when 20 payment by an account debtor to the transferor no longer 21 discharges the obligation of the account debtor under 22 subsection (8) to the extent of the payment. 23 (2) Subsection (1) does not apply if the account debtor makes an 24 enforceable agreement not to assert defences to claims arising out 25 of the contract. 26 Effect of modification or substitution of contract on transferee 27 (3) Unless the account debtor has otherwise agreed, a modification of, 28 or substitution for, the contract between the account debtor and the 29 transferor is effective against the transferee (including a secured 30 party or a receiver) if: 31 (a) the account debtor and the transferor have acted honestly in 32 modifying or substituting the contract; and Personal Property Securities Bill 2009 No. , 2009 95
Chapter 2 General rules relating to security interests Part 2.7 Transfer and assignment of interest in collateral Section 80 1 (b) the manner in which the modification or the substitution is 2 made is commercially reasonable; and 3 (c) the modification or substitution does not have a material 4 adverse effect on: 5 (i) the transferee's rights under the contract; or 6 (ii) the transferor's ability to perform the contract. 7 Note: For the meaning of modification, see section 10. 8 (4) Subsection (3) applies: 9 (a) to the extent that a transferred right to payment arising out of 10 the contract has not been fully earned by performance; and 11 (b) even if there has been notice of the transfer to the account 12 debtor. 13 (5) If a contract has been modified or substituted in the manner 14 described in subsection (3), the transferee obtains rights that 15 correspond to the rights of the transferor under the contract as 16 modified or substituted. 17 (6) Nothing in subsections (3) to (5) affects the validity of a term in a 18 transfer agreement that provides that a modification or substitution 19 mentioned in subsection (3) is a breach of contract by the 20 transferor. 21 Payment by account debtor after transfer 22 (7) If collateral that is an account or chattel paper is transferred, the 23 account debtor may continue to make payments under the contract 24 to the transferor: 25 (a) until the account debtor receives a notice that: 26 (i) states that the amount payable or to become payable 27 under the contract has been transferred; and 28 (ii) states that payment is to be made to the transferee; and 29 (iii) identifies the contract (whether specifically or by class) 30 under which the amount payable is to become payable; 31 or 32 (b) after receiving a notice under paragraph (a) (other than a 33 notice from the transferor), if: 96 Personal Property Securities Bill 2009 No. , 2009
General rules relating to security interests Chapter 2 Transfer and assignment of interest in collateral Part 2.7 Section 81 1 (i) the account debtor requests the transferee to provide 2 proof of the transfer; and 3 (ii) the transferee fails to provide proof before the end of 5 4 business days after the day of the request. 5 (8) Payment by an account debtor to a transferee in accordance with a 6 notice under paragraph (7)(a) (including in the circumstances 7 described in paragraph (7)(b)) discharges the obligation of the 8 account debtor to the extent of the payment. 9 81 Rights on transfer of account or chattel paper--contractual 10 restrictions and prohibitions on transfer 11 Scope 12 (1) This section applies to a term in a contract if: 13 (a) the contract is between an account debtor and a transferor; 14 and 15 (b) the term restricts or prohibits transfer of any of the following 16 for currency due or to become due: 17 (i) the whole of an account that is the proceeds of 18 inventory; 19 (ii) the whole of an account that arises from granting a right 20 (other than a right granted under a construction 21 contract), or providing services (other than financial 22 services), in the ordinary course of a business of 23 granting rights or providing services of that kind 24 (whether or not the account debtor is the person to 25 whom the right is granted or the services are provided); 26 (iii) the whole of an account that is the proceeds of an 27 account mentioned in subparagraph (ii); 28 (iv) chattel paper. 29 Statutory restriction on contracts 30 (2) The term in the contract: 31 (a) is binding on the transferor, but only to the extent of making 32 the transferor liable in damages for breach of contract; and 33 (b) is unenforceable against third parties. 34 Personal Property Securities Bill 2009 No. , 2009 97
Chapter 3 Specific rules for certain security interests Part 3.1 Guide to this Chapter Section 82 1 Chapter 3--Specific rules for certain security 2 interests 3 Part 3.1--Guide to this Chapter 4 5 82 Guide to this Chapter 6 This Chapter contains specific rules for certain security interests. 7 Part 3.2 contains some specific rules relating to agricultural 8 interests (such as security interests in crops and livestock). 9 Part 3.3 deals with security interests in accessions to personal 10 property. 11 Part 3.4 deals with security interests in personal property that loses 12 its identity by being processed or commingled. 13 Part 3.5 deals with security interests in intellectual property. 14 98 Personal Property Securities Bill 2009 No. , 2009
Specific rules for certain security interests Chapter 3 Agricultural interests Part 3.2 Section 83 1 Part 3.2--Agricultural interests 2 3 83 Guide to this Part 4 This Part includes rules on 2 topics: 5 (a) the relationship between a security interest in crops 6 and interests in the land on which the crops are 7 growing; 8 (b) rules giving priority to security interests in crops 9 granted to enable the crops to be produced, and 10 security interests in livestock granted to enable the 11 livestock to be fed and developed. 12 84 Relationship between security interest in crops and interest in 13 land 14 Effect of security interest in crops on lessor or mortgagee of land 15 (1) A security interest in crops does not prejudicially affect the rights 16 of a lessor or mortgagee of land on which the crops are growing if: 17 (a) those rights existed at the time the security interest was 18 created; and 19 (b) the lessor or mortgagee has not consented in writing to the 20 creation of the security interest. 21 Effect of sale etc. of land on perfected security interest in crops 22 (2) Subject to subsection (1), a perfected security interest in crops is 23 not prejudicially affected by a subsequent sale, lease or mortgage 24 of, or other encumbrance on, the land on which the crops are 25 growing. Personal Property Securities Bill 2009 No. , 2009 99
Chapter 3 Specific rules for certain security interests Part 3.2 Agricultural interests Section 85 1 85 Priority of crops 2 A perfected security interest (the priority interest) in crops has 3 priority over any other security interest in crops that is granted by 4 the same grantor in the same crops if: 5 (a) the priority interest is granted for value; and 6 (b) the priority interest is granted to enable the crops to be 7 produced; and 8 (c) either: 9 (i) the security agreement providing for the priority interest 10 is made while the crops are growing; or 11 (ii) the crops are planted during the period of 6 months after 12 the day the security agreement providing for the priority 13 interest is made. 14 86 Priority of livestock 15 A perfected security interest (the priority interest) that is granted 16 by a grantor in livestock has priority over any other security 17 interest (other than a purchase money security interest) that is 18 granted by the same grantor in the same livestock if: 19 (a) the priority interest is granted for value; and 20 (b) the priority interest is granted to enable the livestock to be 21 fed or developed; and 22 (c) either: 23 (i) the livestock are held by the grantor at the time the 24 security agreement providing for the priority interest is 25 made; or 26 (ii) the livestock are acquired by the grantor during the 27 period of 6 months after the day the security agreement 28 providing for the priority interest is made. 29 100 Personal Property Securities Bill 2009 No. , 2009
Specific rules for certain security interests Chapter 3 Accessions Part 3.3 Section 87 1 Part 3.3--Accessions 2 3 87 Guide to this Part 4 This Part deals with security interests in accessions to personal 5 property. 6 A security interest in goods that become an accession to other 7 goods continues in the accession. 8 The Part sets out the priority between an interest (whether or not a 9 security interest) in an accession and the goods to which the 10 accession is affixed. 11 A security interest arising in an accession before it is affixed to 12 goods has priority over a security interest in the goods as a whole. 13 However, there are exceptions relating to interests in the whole 14 created after the accession is affixed and before the security 15 interest in the accession is perfected. 16 A security interest arising in an accession after it is affixed will 17 ordinarily be subordinate to an existing interest in the other goods 18 (unless, for example, the holder of the existing interest agrees 19 otherwise) and to a later interest in the other goods that arises 20 before the interest in the accession is perfected. 21 The Part also deals with the removal of accessions by a secured 22 party who has an interest in the accession. 23 88 Continuation of security interests in accessions 24 A security interest in goods that become an accession to other 25 goods continues in the accession. 26 Note: However, a person might take an interest in the accession free of the 27 security interest because of another provision of this Act. Personal Property Securities Bill 2009 No. , 2009 101
Chapter 3 Specific rules for certain security interests Part 3.3 Accessions Section 89 1 89 Default rule--interest in accession has priority 2 Except as otherwise provided in this Act, a security interest in 3 goods that is attached at the time when the goods become an 4 accession has priority over a claim to the goods as an accession 5 made by a person with an interest in the whole. 6 90 Priority interest in whole--before security interest in accession is 7 perfected 8 The interest of any of the following persons has priority over a 9 security interest in goods that is attached at the time when the 10 goods become an accession: 11 (a) a person who acquires for value an interest in the whole after 12 the goods become an accession, but before the security 13 interest in the accession is perfected; 14 (b) an assignee for value of a person with an interest in the whole 15 at the time when the goods become an accession, but before 16 the security interest in the accession is perfected; 17 (c) a person with a perfected security interest in the whole who 18 makes an advance under the security agreement relating to 19 the security interest after the goods become an accession, but 20 before the security interest in the accession is perfected, and 21 only to the extent of the advance; 22 (d) a person with a perfected security interest in the whole who 23 acquires the right to retain the whole in satisfaction of the 24 obligation secured after the goods become an accession, but 25 before the security interest in the accession is perfected. 26 91 Priority interest in whole--security interest in accession attaches 27 after goods become accession 28 A security interest in goods that attaches after the goods become an 29 accession is subordinate to the interest of: 30 (a) a person who has an interest in the other goods at the time 31 when the goods become an accession and who: 32 (i) has not consented to the security interest in the 33 accession; and 34 (ii) has not disclaimed an interest in the accession; and 102 Personal Property Securities Bill 2009 No. , 2009
Specific rules for certain security interests Chapter 3 Accessions Part 3.3 Section 92 1 (iii) has not entered into an agreement under which another 2 person is entitled to remove the accession; and 3 (iv) is otherwise entitled to prevent the grantor from 4 removing the accession; or 5 (b) a person who acquires an interest in the whole after the goods 6 become an accession, but before the security interest in the 7 accession is perfected. 8 92 Secured party must not damage goods when removing accession 9 A secured party who is entitled to remove an accession under 10 section 123 (seizure of collateral) must remove the accession from 11 the whole in a manner that causes no greater damage to the other 12 goods, or that puts the person in possession of the whole to no 13 greater inconvenience, than is necessarily incidental to the removal 14 of the accession. 15 93 Reimbursement for damage caused in removing accessions 16 (1) A person, other than the grantor, who has an interest in the other 17 goods at the time the goods become an accession is entitled to 18 reimbursement for any damage to that person's interest in the other 19 goods caused by the removal of the accession. 20 (2) Any reimbursement payable under subsection (1) does not include 21 reimbursement for a reduction in the value of the property caused 22 by the absence of the accession or by the necessity of the 23 replacement of the accession. 24 94 Refusal of permission to remove accession 25 A person entitled to reimbursement under section 93 may refuse 26 permission to remove the accession until the secured party has 27 given adequate security for the reimbursement. 28 95 Secured party must give notice of removal of accession 29 Notice required to be given by secured party 30 (1) A secured party who is entitled to remove an accession from the 31 whole must give notice of the secured party's intention to remove Personal Property Securities Bill 2009 No. , 2009 103
Chapter 3 Specific rules for certain security interests Part 3.3 Accessions Section 95 1 the accession to each of the following persons in accordance with 2 subsections (2) and (3): 3 (a) the grantor; 4 (b) a secured party with a security interest in the accession that 5 has a higher priority. 6 (2) The secured party must give a notice to a person: 7 (a) at least 10 business days before the day the accession is 8 removed; or 9 (b) if the person has given a written notice to the secured party 10 specifying a smaller number of days to apply for the purposes 11 of this section--at least that number of days before the 12 accession is removed. 13 (3) A notice must contain the following: 14 (a) the name of the secured party giving the notice; 15 (b) a description of the accession and of the other goods; 16 (c) a statement of the obligation owed to the secured party, and 17 the value of the accession if the accession were removed 18 from the other goods; 19 (d) a statement of intention to remove the accession, unless the 20 obligation secured by the security interest in the accession is 21 discharged, or the value of the accession is paid, before the 22 end of the period to which subsection (2) applies. 23 (4) The notice may be given in the approved form. 24 When notice is not required 25 (5) The secured party is not required to give a notice to a person under 26 subsection (1) if, after the debtor defaults, the person gives written 27 consent to the secured party to remove the accession without 28 receiving a notice. 29 (6) The secured party is not required to give a notice to any person 30 under subsection (1) if: 31 (a) the secured party believes on reasonable grounds that the 32 accession will decline substantially in value if it is not 33 disposed of immediately after default; or 104 Personal Property Securities Bill 2009 No. , 2009
Specific rules for certain security interests Chapter 3 Accessions Part 3.3 Section 96 1 (b) the cost of expenses for the retention of the accession that are 2 secured against the accession is disproportionately large in 3 relation to its value. 4 Note: In addition, a secured party is not required to give a notice in any of 5 the circumstances set out in section 144 (when certain enforcement 6 notices are not required). 7 (7) A person is not entitled to a notice under subsection (1) in relation 8 to an accession to goods only because the person has an interest in 9 another accession to the same goods. 10 96 When person with an interest in the whole may retain accession 11 A person, other than the grantor, who has an interest in the whole 12 of goods that under this Act is subordinate to a security interest in 13 an accession, may retain the accession if: 14 (a) the obligation to the secured party with a security interest that 15 has priority over all other security interests in the accession is 16 performed; or 17 (b) the secured party mentioned in paragraph (a) is paid the value 18 of the accession at the time of payment, if the accession were 19 to be removed from the goods. 20 97 Court order about removal of accession 21 A court may, on the application of a person entitled to receive a 22 notice under section 95 (notice of removal of an accession), make 23 an order: 24 (a) postponing the removal of the accession; or 25 (b) determining the amount payable to the secured party under 26 section 96 for the retention of the accession. 27 Note: For which courts have jurisdiction, and for transfers between courts, 28 see Part 6.2. 29 Personal Property Securities Bill 2009 No. , 2009 105
Chapter 3 Specific rules for certain security interests Part 3.4 Processed or commingled goods Section 98 1 Part 3.4--Processed or commingled goods 2 3 98 Guide to this Part 4 This Part deals with security interests in goods that become an 5 unidentifiable part of a larger product or mass. 6 A security interest in the original goods continues in the product or 7 mass. The Part sets out perfection and priority rules that apply in 8 this situation. 9 99 Continuation of security interests in goods that become processed 10 or commingled 11 (1) A security interest in goods that subsequently become part of a 12 product or mass continues in the product or mass if the goods are 13 so manufactured, processed, assembled or commingled that their 14 identity is lost in the product or mass. 15 Note: A person might take an interest in the product or mass free of the 16 security interest because of the operation of another provision of this 17 Act. 18 (2) Without limiting subsection (1), the identity of goods that are 19 manufactured, processed, assembled or commingled is lost in a 20 product or mass if it is not commercially practical to restore the 21 goods to their original state. 22 100 Perfection of security interest in goods that become processed or 23 commingled applies to product or mass 24 For the purposes of section 55 (default priority rules), perfection of 25 a security interest in goods that subsequently become part of a 26 product or mass is to be treated as perfection of the security interest 27 in the product or the mass. 106 Personal Property Securities Bill 2009 No. , 2009
Specific rules for certain security interests Chapter 3 Processed or commingled goods Part 3.4 Section 101 1 101 Limit on value of priority of goods that become part of 2 processed or commingled goods 3 Any priority that a security interest continuing in the product or 4 mass has over another security interest in the product or mass is 5 limited to the value of the goods on the day on which they became 6 part of the product or mass. 7 102 Priority where more than one security interest continues in 8 processed or commingled goods 9 (1) A perfected security interest continuing in a product or mass has 10 priority over an unperfected security interest continuing in the 11 same product or mass. 12 (2) If more than one perfected security interest continues in the same 13 product or mass, each perfected security interest is entitled to share 14 in the product or mass according to the ratio that the obligation 15 secured by the perfected security interest bears to the sum of the 16 obligations secured by all perfected security interests in the same 17 product or mass. 18 (3) If more than one unperfected security interest continues in the 19 same product or mass, each unperfected security interest is entitled 20 to share in the product or mass according to the ratio that the 21 obligation secured by the unperfected security interest bears to the 22 sum of the obligations secured by all unperfected security interests 23 in the same product or mass. 24 (4) For the purposes of this section, the obligation secured by a 25 security interest does not exceed the value of the goods on the day 26 on which the goods became part of the product or mass. 27 103 Priority of purchase money security interest in processed or 28 commingled goods 29 Despite section 102, a perfected purchase money security interest 30 in goods that continues in the product or mass has priority over: 31 (a) a non-purchase money security interest in the goods that 32 continues in the product or mass; and Personal Property Securities Bill 2009 No. , 2009 107
Chapter 3 Specific rules for certain security interests Part 3.4 Processed or commingled goods Section 103 1 (b) a non-purchase money security interest in the product or 2 mass given by the same grantor. 3 108 Personal Property Securities Bill 2009 No. , 2009
Specific rules for certain security interests Chapter 3 Intellectual property Part 3.5 Section 104 1 Part 3.5--Intellectual property 2 3 104 Guide to this Part 4 This Part includes some rules with a particular application to 5 security interests in intellectual property and intellectual property 6 licences. 7 If the exercise of rights by a secured party in relation to goods 8 necessarily involves the exercise of intellectual property rights 9 covered by the security interest, this Act applies to the intellectual 10 property rights in the same way as it applies to the goods. 11 The Part also deals with a transfer of intellectual property that is 12 the subject of a licence (or sub-licence) in which a security interest 13 is granted. The security agreement binds the successors in title to 14 the licensor or sub-licensor. 15 105 Implied references to intellectual property rights 16 Act applies to intellectual property rights etc. 17 (1) This Act applies to intellectual property rights (including rights 18 exercisable under an intellectual property licence), in relation to 19 goods, in the same way as it applies to the goods, if: 20 (a) the exercise by a secured party of rights in relation to the 21 goods arising under a security agreement necessarily involves 22 an exercise of the intellectual property rights; and 23 (b) the payment or obligation secured by the security interest is 24 (in addition) secured by a security interest that is attached to 25 the intellectual property rights. 26 Description of goods taken to include a description of intellectual 27 property rights 28 (2) For the purposes of this Act, if a registration perfects the security 29 interest in goods mentioned in subsection (1), the following 30 descriptions are taken to include a description of the intellectual Personal Property Securities Bill 2009 No. , 2009 109
Chapter 3 Specific rules for certain security interests Part 3.5 Intellectual property Section 106 1 property rights concerned, or of an intellectual property licence 2 required to exercise those rights: 3 (a) a description of the goods in the security agreement; 4 (b) the registered description of the goods; 5 (c) a description of the goods included in a notice under this Act. 6 (3) Subsection (2) applies subject to a contrary intention in the security 7 agreement, registration or notice. 8 106 Intellectual property licences and transfers of intellectual 9 property 10 (1) If: 11 (a) a security interest is granted in an intellectual property 12 licence; and 13 (b) the intellectual property in which the licence is granted is 14 later transferred; and 15 (c) the licensee of the intellectual property licence continues to 16 hold the licence after the transfer; 17 the security agreement that provides for the security interest binds 18 every successor in title to the licensor of the intellectual property 19 licence to the same extent as the security agreement was binding 20 on the licensor. 21 (2) If: 22 (a) a security interest is granted in a sub-licence granted under an 23 intellectual property licence; and 24 (b) the intellectual property licence under which the sub-licence 25 is granted is later transferred; and 26 (c) the licensee of the sub-licence continues to hold the 27 sub-licence after the transfer; 28 the security agreement that provides for the security interest binds 29 every successor in title to the licensor of the sub-licence to the 30 same extent as the security agreement was binding on the licensor. 31 110 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Guide to this Chapter Part 4.1 Section 107 1 Chapter 4--Enforcement of security interests 2 Part 4.1--Guide to this Chapter 3 4 107 Guide to this Chapter 5 This Chapter deals with how to enforce a security interest in 6 personal property. Parties can contract out of some of the 7 provisions of this Chapter. 8 Security interests in liquid assets can be enforced by giving a 9 notice to the person who owes an amount to the grantor. Other 10 kinds of assets can be seized and disposed of under Part 4.3. A 11 secured party can also retain or purchase the collateral. 12 Proceeds arising from the disposal of collateral must be distributed 13 in accordance with Part 4.4. That Part also contains other rules of 14 general application in relation to the enforcement of security 15 interests. 16 Personal Property Securities Bill 2009 No. , 2009 111
Chapter 4 Enforcement of security interests Part 4.2 General rules Section 108 1 Part 4.2--General rules 2 3 108 Guide to this Part 4 This Part provides general rules about the rights and remedies 5 available to a party to a security agreement for enforcing a security 6 interest in personal property. The Part does not apply to certain 7 kinds of security interests. 8 Important rules include the following: 9 (a) a general standard of honesty and commercial 10 reasonableness is to apply to enforcement actions; 11 (b) parties can contract out of specified provisions of 12 this Chapter; 13 (c) if the same obligation is secured by both personal 14 property and an interest in land, a secured party 15 may decide to enforce the personal property 16 interest in the same way as the interest in the land 17 would be enforced, or to enforce the security 18 interest under this Chapter; 19 (d) rules for the enforcement of security interests in 20 certain liquid assets (accounts, chattel paper and 21 negotiable instruments) by giving notice to 22 specified persons or seizing proceeds. 23 109 Application of this Chapter 24 Security interests to which this Chapter does not apply 25 (1) This Chapter does not apply to security interests that are provided 26 for by the following: 27 (a) a transfer of an account or chattel paper that does not secure 28 payment or performance of an obligation; 112 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 General rules Part 4.2 Section 109 1 (b) a security interest that is incidental to a security interest 2 referred to in paragraph (a); 3 (c) a PPS lease that does not secure payment or performance of 4 an obligation; 5 (d) a commercial consignment that does not secure payment or 6 performance of an obligation. 7 (2) This Chapter does not apply to security interests in goods that are 8 located outside Australia. 9 Note: For where personal property is located, see section 235. 10 Security interests in investment instruments or investment 11 entitlements that are perfected by possession or control 12 (3) This Chapter (apart from sections 110, 111, 113 and 140) does not 13 apply in relation to a person who has perfected a security interest 14 in: 15 (a) an investment instrument by taking possession or control of 16 the instrument; or 17 (b) an investment entitlement by taking control of the 18 entitlement. 19 (4) To avoid doubt, subsection (3) applies whether the person has 20 perfected the security interest only by possession or control, or by 21 another method as well. 22 Sections that do not apply to household property 23 (5) The following provisions do not apply in relation to collateral that 24 is used by a grantor predominantly for personal, domestic or 25 household purposes: 26 (a) sections 117 and 118 (relationship with land laws); 27 (b) section 120 (enforcement of security interests in liquid 28 assets); 29 (c) paragraphs 128(2)(b) and (c) (disposal of collateral by lease 30 or licence); 31 (d) section 129 (disposal by purchase); 32 (e) section 134 (retention of collateral). Personal Property Securities Bill 2009 No. , 2009 113
Chapter 4 Enforcement of security interests Part 4.2 General rules Section 110 1 110 Rights and remedies 2 This Act does not derogate in any way from the rights and 3 remedies the following parties to a security agreement have, apart 4 from this Act, against each other in relation to a default by the 5 debtor under the security agreement: 6 (a) the debtor; 7 (b) the grantor; 8 (c) a secured party. 9 111 Rights and duties to be exercised honestly and in a commercially 10 reasonable manner 11 (1) All rights, duties and obligations that arise under this Chapter must 12 be exercised or discharged: 13 (a) honestly; and 14 (b) in a commercially reasonable manner. 15 (2) A person does not act dishonestly merely because the person acts 16 with actual knowledge of the interest of some other person. 17 112 Rights and remedies under this Chapter 18 (1) In exercising rights and remedies provided by this Chapter, a 19 secured party may deal with collateral only to the same extent as 20 the grantor would be entitled to so deal with the collateral. 21 (2) However, subsection (1) does not apply: 22 (a) if the secured party had title to the collateral immediately 23 before starting to exercise any right or remedy provided by 24 this Part; or 25 (b) to the extent that it would otherwise prevent the secured party 26 from dealing with the collateral by way of transfer because a 27 transfer by the grantor would be prohibited or declared to be 28 a default under an agreement (whether or not a security 29 agreement). 30 Note: See section 79 (transfer of collateral despite prohibition in 31 security agreement). 114 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 General rules Part 4.2 Section 113 1 (3) Without limiting subsection (1), under this Chapter a secured party 2 may only seize, purchase or dispose of a licence subject to: 3 (a) the terms and conditions of the licence; and 4 (b) any applicable law of the Commonwealth, a State or a 5 Territory. 6 113 Recovering judgment or issuing execution does not extinguish a 7 security interest in collateral 8 The fact that a secured party has recovered judgment, or issued 9 execution, against a grantor in relation to collateral does not 10 extinguish the security interest in the collateral. 11 114 Rights and remedies under this Chapter are cumulative 12 The rights and remedies provided by this Chapter are cumulative. 13 115 Contracting out of enforcement provisions 14 Collateral not used predominantly for personal, domestic or 15 household purposes 16 (1) The parties to a security agreement that provides for a security 17 interest in collateral that is not used predominantly for personal, 18 domestic or household purposes may contract out of the following 19 provisions in relation to the collateral (to the extent, if any, 20 mentioned): 21 (a) section 95 (notice of removal of accession), to the extent that 22 it requires the secured party to give a notice to the grantor; 23 (b) section 96 (when a grantor may retain an accession); 24 (c) section 117 (obligations secured by interests in personal 25 property and land); 26 (d) section 118 (enforcing security interests in accordance with 27 land law decisions), to the extent that it allows a secured 28 party to give a notice to the grantor; 29 (e) section 120 (enforcement of liquid assets); 30 (f) subsection 121(4) (enforcement of liquid assets--notice to 31 grantor); 32 (g) section 123 (right to seize collateral); Personal Property Securities Bill 2009 No. , 2009 115
Chapter 4 Enforcement of security interests Part 4.2 General rules Section 115 1 (h) section 125 (obligation to dispose of or retain collateral); 2 (i) section 126 (apparent possession); 3 (j) section 128 (secured party may dispose of collateral); 4 (k) section 129 (disposal by purchase); 5 (l) section 130 (notice of disposal), to the extent that it requires 6 the secured party to give a notice to the grantor; 7 (m) paragraph 132(3)(d) (contents of statement of account after 8 disposal); 9 (n) subsection 132(4) (statement of account if no disposal); 10 (o) subsection 134(1) (retention of collateral); 11 (p) section 135 (notice of retention); 12 (q) section 142 (redemption of collateral); 13 (r) section 143 (reinstatement of security agreement). 14 (2) However, if parties to a security agreement contract out of a 15 provision, the provision continues to the extent that it gives rights 16 to, and imposes obligations in relation to, persons who are not 17 parties to the security agreement. 18 Example: Parties to a security agreement contract out of the right to seize 19 property under section 123. A secured party who is not a party to the 20 security agreement may seize the property under section 123. 21 (3) Despite subsection (2), if parties to a security agreement contract 22 out of section 142 (redemption of collateral), the provision does 23 not give any person (whether or not the person is a party to the 24 agreement) a right to redeem collateral under section 142. 25 Collateral that is used predominantly for personal, domestic or 26 household purposes 27 (4) The parties to a security agreement that provides for a security 28 interest in collateral that is used predominantly for personal, 29 domestic or household purposes may contract out of section 126 30 (apparent possession) in relation to the collateral. 31 Contracts between persons other than the grantor 32 (5) A person (including a secured party, but not including the grantor) 33 who is entitled to receive a notice from a secured party under one 116 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 General rules Part 4.2 Section 116 1 or more provisions in this Chapter may contract with the secured 2 party out of one or more of those provisions. 3 (6) 2 secured parties may contract out of the right of one of the secured 4 parties to receive an amount under subsection 127(6) (payment of 5 enforcing party's expenses) from the other secured party. 6 116 Chapter does not apply to property in the hands of receivers or 7 controllers 8 (1) This Chapter does not apply in relation to property while a person 9 is a receiver, a receiver and manager, or a controller of the 10 property. 11 (2) Without limiting subsection (1), the meaning of the following 12 terms includes their meaning as given by the Corporations Act 13 2001: 14 (a) receiver and manager; 15 (b) controller, in relation to the property of a corporation. 16 117 Obligations secured by interests in personal property and land 17 Scope 18 (1) This section applies if: 19 (a) the same obligation is secured by: 20 (i) a security interest in personal property; and 21 (ii) an interest in land; and 22 (b) either: 23 (i) the secured party's security interest in the personal 24 property has the highest priority; or 25 (ii) every other secured party with a security interest in the 26 personal property that has a higher priority has agreed in 27 writing to the secured party's making a decision under 28 this section. 29 Note 1: This section does not apply in relation to collateral that is used 30 predominantly for personal, domestic or household purposes (see 31 subsection 109(5)). Personal Property Securities Bill 2009 No. , 2009 117
Chapter 4 Enforcement of security interests Part 4.2 General rules Section 117 1 Note 2: Also, this section does not apply in relation to a security interest in 2 collateral to which consumer credit legislation applies (see 3 section 119). 4 Note 3: The interest in land might be an interest to which this Act would 5 otherwise not apply (see subsection 8(2)). 6 Decision by secured party 7 (2) The secured party may: 8 (a) make a decision to enforce the security interest in the 9 personal property under this Chapter; or 10 (b) make a decision to enforce the security interest in the 11 personal property in the same way as the interest in the land 12 may be enforced under the land law. 13 (3) In making a decision under subsection (2), the secured party must 14 act reasonably and only take into account the following matters: 15 (a) the respective values of the personal property and the land; 16 (b) whether there is any connection between, and the nature of 17 any connection between, the personal property and the land; 18 (c) whether the land and the personal property are both located 19 in the same State or Territory; 20 (d) such other matters as are relevant to the efficient enforcement 21 of the security interest and the interest in the land. 22 Decision to enforce the security interest under this Chapter 23 (4) Enforcing the security interest in the personal property under this 24 Chapter, in accordance with a decision under paragraph (2)(a), 25 does not limit the secured party's rights, remedies and duties with 26 respect to the land. 27 Meaning of land law 28 (5) In this Act: 29 land law, in relation to an obligation mentioned in 30 paragraph (1)(a), means those provisions of a law of a State or 31 Territory, or of the general law, that relate to the enforcement of 32 the interest in land that secures the obligation. 118 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 General rules Part 4.2 Section 118 1 118 Enforcing security interests in accordance with land law 2 decisions 3 Scope 4 (1) This section applies if: 5 (a) a secured party makes a decision (under paragraph 117(2)(b)) 6 to enforce the security interest in the personal property in the 7 same way as the interest in the land may be enforced under 8 the land law; and 9 (b) unless section 144 applies, the secured party gives a notice in 10 accordance with subsection (2) to the following persons: 11 (i) the grantor; 12 (ii) a secured party with a security interest in the personal 13 property that is perfected immediately before the 14 decision under paragraph 117(2)(b) is made; 15 (iii) any person who, by the time the secured party gives the 16 notice, has notified the secured party in writing that the 17 person claims an interest in the personal property. 18 (2) A notice is given in accordance with this subsection if: 19 (a) the notice is in the approved form; or 20 (b) the notice: 21 (i) contains a description of the personal property to which 22 the notice relates; and 23 (ii) sets out the effect of this section. 24 How security interest is to be enforced 25 (3) The secured party may enforce the security interest in the same 26 way, with any necessary modification, as the interest in the land 27 may be enforced under the land law. 28 (4) Subject to this section, and with any necessary modification, law in 29 the same terms as that of the land law applies under this Act for the 30 purposes of the enforcement of the security interest. 31 Example: The secured party has the same rights, remedies and duties in relation 32 to the enforcement of the security interest in the personal property as 33 the secured party has in relation to the enforcement of the interest in 34 the land. Personal Property Securities Bill 2009 No. , 2009 119
Chapter 4 Enforcement of security interests Part 4.2 General rules Section 118 1 Note: The effect of this subsection is not to adopt the land law as such, but 2 to apply law to the same effect as the land law (with any necessary 3 modification, and subject to this section). 4 (5) The regulations may modify the law that applies by virtue of 5 subsection (4) in order to facilitate its application to the 6 enforcement of security interests in the personal property. 7 Note: For the meaning of modification, see section 10. 8 Additional law that applies 9 (6) Section 140 (distribution of proceeds), section 117 and this section 10 apply to the enforcement of the security interest in the personal 11 property. Otherwise, this Chapter does not apply to the 12 enforcement of the security interest in the personal property. 13 (7) In addition: 14 (a) the decision of the secured party (the first secured party) 15 under paragraph 117(2)(b) does not limit the rights of any 16 other secured party (the other secured party) who has a 17 security interest in the personal property (whether granted 18 before or after the first secured party's security interest); and 19 (b) the other secured party has standing in proceedings taken by 20 (or on behalf of) the first secured party in enforcing the first 21 secured party's security interest under this section; and 22 (c) the other secured party may apply to a court for the conduct 23 of a judicially supervised sale for the purposes of enforcing 24 the first secured party's security interest under this section; 25 and 26 (d) the court may grant the application. 27 Note: For which courts have jurisdiction, and for transfers between courts, 28 see Part 6.2. 29 Exercise of powers etc. under applied law 30 (8) The Minister may make an agreement with the appropriate 31 Minister of a State or Territory in relation to the exercise or 32 performance of a power, duty or function (not being a power, duty 33 or function involving the exercise of judicial power) by an 34 authority of the State or Territory for the purposes of the law that 35 applies by virtue of subsection (4). 120 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 General rules Part 4.2 Section 119 1 (9) If such an agreement is in force, the power, duty or function may 2 or must be exercised or performed accordingly. 3 (10) The Minister may make an agreement with the appropriate 4 Minister of a State or Territory for the variation or revocation of an 5 agreement made under this section in relation to the State. 6 (11) An agreement made under subsection (8) or (10) is not a legislative 7 instrument. 8 This section does not affect land laws 9 (12) To avoid doubt, nothing in this section is intended to modify a land 10 law, or to affect its operation. 11 119 Relationship with consumer credit legislation 12 (1) This Chapter, except sections 117 and 118, applies in relation to a 13 security interest in collateral to which the Consumer Credit Code 14 of a State or Territory applies. 15 (2) The regulations may provide that a specified provision of this 16 Chapter is taken to have been complied with in specified 17 circumstances if a specified provision of the Consumer Credit 18 Code of a State or Territory has been complied with in those 19 circumstances. 20 120 Enforcement of security interests in liquid assets--general 21 (1) This section applies if: 22 (a) an obligation (the secured obligation) is secured by a 23 security interest in collateral in the form of one of the 24 following: 25 (i) an account; 26 (ii) chattel paper; 27 (iii) a negotiable instrument; and 28 (b) one or more persons owe an amount to the grantor on the 29 collateral; and 30 (c) the debtor defaults on the secured obligation. Personal Property Securities Bill 2009 No. , 2009 121
Chapter 4 Enforcement of security interests Part 4.2 General rules Section 121 1 Note: This section does not apply in relation to collateral that is used 2 predominantly for personal, domestic or household purposes (see 3 subsection 109(5)). 4 Rights of secured party 5 (2) A secured party may do either or both of the following: 6 (a) give a written notice to a person mentioned in 7 paragraph (1)(b) that: 8 (i) sets out the effect of subsection (3); or 9 (ii) is in the approved form; 10 (b) seize any proceeds of the collateral to which the secured 11 party is entitled under section 32. 12 Note: A secured party might be prevented from taking action under this 13 subsection by a higher priority party (see subsection 121(3)). 14 (3) A person who receives a notice under paragraph (2)(a) must pay, to 15 the secured party, any amount that the person owes to the grantor 16 on the collateral before the end of 5 business days after the later of: 17 (a) the day the notice is received; or 18 (b) the day the amount becomes due and payable. 19 Note: The period mentioned in this subsection may be extended by a court 20 under section 293. 21 (4) The secured party must apply any amount received under 22 paragraph (2)(b) or subsection (3) towards the secured obligation. 23 (5) If any amount is received under paragraph (2)(b) or subsection (3) 24 in the form of currency, then the amount must be distributed in 25 accordance with section 140. 26 121 Enforcement of security interests in liquid assets--notice to 27 higher priority parties and grantor 28 Notice to higher priority parties 29 (1) Unless section 144 applies, a secured party (the enforcing party) 30 who proposes to take action under subsection 120(2) in relation to 31 a security interest in collateral must give a written notice to any 32 other secured party (a higher priority party) with a security interest 33 in the collateral that has a higher priority. 122 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 General rules Part 4.2 Section 121 1 (2) The notice must: 2 (a) contain the name of the secured party giving the notice; and 3 (b) contain a description of the collateral; and 4 (c) state that the enforcing party proposes to take action under 5 paragraph 120(2)(a) or (b), as the case requires; and 6 (d) state the address to which a notice may be given under 7 subsection (3); and 8 (e) be given to each higher priority party: 9 (i) at least 10 business days before the day the action is to 10 be taken; or 11 (ii) if a higher priority party has given a written notice to 12 the enforcing party specifying a shorter period to apply 13 for the purposes of this subsection--before the end of 14 that period. 15 Note: The period mentioned in paragraph (e) may be extended by a 16 court under section 293. 17 (3) A higher priority party who is given a notice under subsection (1) 18 may, before any action is taken under subsection 120(2), give a 19 written notice to the enforcing party informing the enforcing party 20 of the higher priority party's proposal to take action under that 21 subsection. If the higher priority party gives such a notice, the 22 enforcing party is not entitled to take action under that subsection. 23 Notice to grantor 24 (4) A secured party must give a written notice to the grantor of any 25 action the secured party takes in accordance with subsection 26 120(2). 27 (5) The notice under subsection (4) must be given: 28 (a) before the end of 5 business days after the day the action is 29 taken; or 30 (b) if the grantor has given a written notice to the secured party 31 specifying a shorter period to apply for the purposes of this 32 subsection--before the end of that period. 33 Note: The period mentioned in paragraph (a) may be extended by a court 34 under section 293. 35 Personal Property Securities Bill 2009 No. , 2009 123
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 1 Introduction Section 122 1 Part 4.3--Seizure and disposal or retention of 2 collateral 3 Division 1--Introduction 4 122 Guide to this Part 5 This Part deals with the seizure and disposal or retention of 6 collateral following default by a debtor under a security agreement. 7 Division 2 contains rules about when and how a secured party may 8 seize collateral. 9 Division 3 deals with the disposal of collateral by a secured party 10 after seizure of the collateral. 11 Division 4 deals with the retention of collateral by a secured party 12 after seizure of the collateral. 13 If a secured party proposes to dispose of, or retain, collateral, the 14 party must give notice to the grantor and any other secured party 15 with a security interest in the collateral that has a higher priority. 16 A person may object to a proposal by a secured party to enforce a 17 security interest by purchasing or retaining the collateral (see 18 Division 5). 19 124 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Seizing collateral Division 2 Section 123 1 Division 2--Seizing collateral 2 123 Secured party may seize collateral 3 (1) A secured party may seize collateral, by any method permitted by 4 law, if the debtor is in default under the security agreement. 5 Note: For seizure of accessions, see sections 95 to 97. 6 Seizing intangible property 7 (2) For the purposes of this Act, unless subsection (3) applies, a 8 secured party may seize intangible property only by giving a 9 notice, stating that the giving of the notice constitutes seizure of the 10 property, to the following persons: 11 (a) the grantor; 12 (b) if the intangible property is a licence--either: 13 (i) the licensor; or 14 (ii) the licensor's successor. 15 (3) Intangible property may be seized by another method, if so agreed 16 between: 17 (a) the parties to the security agreement; or 18 (b) if the intangible property is a licence--the parties to the 19 security agreement together with the licensor or the licensor's 20 successor. 21 No perfection by seizure 22 (4) A secured party who seizes collateral under this section does not 23 perfect the secured party's security interest in the collateral. 24 124 Secured party who has perfected a security interest in collateral 25 by possession or control 26 (1) This section applies if: 27 (a) a secured party has perfected a security interest in collateral 28 by possession or control of the collateral; and 29 (b) the debtor is in default under the security agreement. Personal Property Securities Bill 2009 No. , 2009 125
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 2 Seizing collateral Section 125 1 (2) A secured party may seize the collateral under section 123 by 2 giving a notice to: 3 (a) the grantor; and 4 (b) if the collateral is a licence--either: 5 (i) the licensor; or 6 (ii) the licensor's successor. 7 (3) To avoid doubt, this section applies whether the secured party has 8 perfected the security interest only by possession or control, or by 9 another method as well. 10 125 Obligation to dispose of or retain collateral 11 (1) A secured party who seizes collateral under section 123 must: 12 (a) dispose of the collateral in accordance with Division 3; or 13 (b) take action to retain the collateral in accordance with 14 Division 4. 15 (2) Before disposing of or taking action to retain the collateral, the 16 secured party is, subject to the security agreement that covers the 17 collateral, entitled to a reasonable period in which: 18 (a) to secure, store and value the collateral; and 19 (b) to determine how to deal with the collateral. 20 (3) The secured party may delay disposing of, or taking action to 21 retain, the whole or part of the collateral beyond the reasonable 22 period mentioned in subsection (2). However, the delay must: 23 (a) if the security agreement providing for the security interest 24 allows for the delay--be in accordance with the security 25 agreement; or 26 (b) otherwise--be reasonable in the circumstances. 27 126 Apparent possession of collateral 28 (1) If: 29 (a) collateral cannot be readily moved from a grantor's premises; 30 or 31 (b) adequate storage facilities are not readily available for 32 collateral; 126 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Seizing collateral Division 2 Section 127 1 a secured party may seize the collateral under section 123 by 2 taking apparent possession of the collateral. 3 (2) A secured party who takes apparent possession of collateral may 4 dispose of the collateral under section 128 on the grantor's 5 premises. However, the secured party must not cause the grantor 6 any greater cost or inconvenience than is necessarily incidental to 7 the disposal. 8 (3) To avoid doubt, a secured party who takes apparent possession of 9 collateral in accordance with this section does not perfect the 10 secured party's security interest in the collateral. 11 127 Seizure by higher priority parties--notice 12 Scope 13 (1) This section applies if, at any time while collateral is seized by a 14 secured party (the enforcing party) (whether under section 123 or 15 otherwise) for the purposes of enforcement, another secured party 16 (the higher priority party) has a security interest in the collateral 17 that has a higher priority under this Act. 18 Notice requiring enforcing party to give possession of collateral to 19 higher priority party 20 (2) The higher priority party may give a written notice to the enforcing 21 party, requiring the enforcing party to give the higher priority party 22 possession of the seized collateral. 23 Note: If a person has a perfected security interest in the collateral that ranks 24 higher than that of the secured party, and the person does not give a 25 notice under this section, the person retains a security interest in the 26 collateral. 27 (3) However, the higher priority party must not give a notice to the 28 enforcing party under subsection (2) unless the higher priority 29 party would be entitled to seize the collateral (in the higher priority 30 party's own right) in accordance with section 123, had the 31 enforcing party not first seized the collateral. 32 (4) An enforcing party who is given a notice under subsection (2) must 33 comply with the notice before the end of the following period: Personal Property Securities Bill 2009 No. , 2009 127
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 2 Seizing collateral Section 127 1 (a) the period of 5 business days after the day the notice is 2 received; 3 (b) such further period as is reasonable in the circumstances. 4 Note: The period may also be extended by a court under section 293. 5 (5) A higher priority party who is given possession of collateral under 6 this section is taken to have complied with the requirements of 7 subsection 123(2) (notice of seizure) in relation to the seizure of 8 the collateral. 9 Payment of enforcing party's expenses 10 (6) A higher priority party who is given possession of collateral under 11 this section must, subject to subsections (7) and (8), pay the 12 enforcing party the amount of any reasonable expenses paid or 13 incurred by the enforcing party, in relation to the enforcement of 14 the security interest in the collateral. 15 Note: 2 secured parties can contract out of this provision (see subsection 16 115(6)). 17 (7) A higher priority party must pay an amount of expenses under 18 subsection (6) only to the extent that, before the higher priority 19 party disposes of the collateral and any proceeds of the collateral 20 sufficient to meet the expenses, the enforcing party gives the 21 higher priority party evidence showing that the enforcing party 22 incurred the amount. 23 (8) The amount payable under subsection (6) is the lesser of the 24 following amounts: 25 (a) the amount mentioned in the subsection; 26 (b) the amount of any proceeds from the higher priority party's 27 disposal of the collateral. 28 (9) A higher priority party must pay an amount of expenses under 29 subsection (6) before the end of 20 business days after the later of 30 the following days: 31 (a) the day the higher priority party disposes of the collateral; 32 (b) the day the enforcing party gives the higher priority party 33 evidence showing that the enforcing party incurred the 34 amount. 128 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Seizing collateral Division 2 Section 127 1 Note: The period may be extended by a court under section 293. 2 (10) The amount under subsection (6) is a debt due to the enforcing 3 party. 4 (11) The enforcing party may apply to a court to recover the amount of 5 the debt, and the court may grant the application. 6 Note: For which courts have jurisdiction, and for transfers between courts, 7 see Part 6.2. 8 Personal Property Securities Bill 2009 No. , 2009 129
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 3 Disposing of collateral (including by purchasing collateral) Section 128 1 Division 3--Disposing of collateral (including by 2 purchasing collateral) 3 128 Secured party may dispose of collateral 4 (1) A secured party may dispose of collateral if the secured party has 5 seized the collateral in the exercise of a right to seize the collateral 6 on default by the debtor (whether under section 123 or otherwise). 7 Note 1: A secured party may dispose of collateral by purchasing the collateral 8 (see section 129). 9 Note 2: The person who takes the collateral as a result of the disposal does so 10 free of certain security interests (see section 133). 11 Note 3: The secured party may act as agent for the grantor in transferring title 12 (see section 141). 13 Method of disposal 14 (2) A secured party may dispose of collateral under this section: 15 (a) by private or public sale (including auction or closed tender); 16 or 17 (b) if the collateral is commercial property, and the security 18 agreement so provides--by lease; or 19 (c) if the collateral is intellectual property--by licence. 20 Note 1: A different rule applies in relation to disposal by purchase (see 21 subsection 129(3)). 22 Note 2: Paragraph (2)(b) does not apply in relation to collateral that is used 23 predominantly for personal, domestic or household purposes (see 24 subsection 109(5)). 25 (3) For the purposes of this Act, if collateral is disposed of by lease or 26 licence, the disposal occurs at the time the lease or licence is 27 entered into. 28 (4) The power to dispose of collateral by a lease or licence must be 29 exercised in accordance with the terms and conditions of the 30 security agreement. 31 (5) A secured party may, under subsection (1), dispose of the whole or 32 part of the collateral. 130 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Disposing of collateral (including by purchasing collateral) Division 3 Section 129 1 Note: The secured party must apply any proceeds etc. of a disposal under 2 this section in accordance with section 140. 3 Disposal of licences 4 (6) The power to dispose of a licence must be exercised subject to: 5 (a) the terms and conditions of the licence; and 6 (b) any applicable law of the Commonwealth, a State or a 7 Territory. 8 129 Disposal by purchase 9 (1) A secured party may, under subsection 128(1), dispose of collateral 10 that is commercial property by purchasing the collateral. 11 Note: This section does not apply in relation to collateral that is used 12 predominantly for personal, domestic or household purposes (see 13 subsection 109(5)). 14 (2) However, the secured party may dispose of the collateral by 15 purchasing it only if: 16 (a) the secured party gives a notice under section 130 stating that 17 the secured party proposes to purchase the collateral; and 18 (b) no notice of objection is given to the secured party in 19 accordance with subsection 137(2). 20 (3) Despite subsection 128(2) and section 131, a secured party may 21 purchase collateral only: 22 (a) by public sale (including auction or closed tender); and 23 (b) by paying at least the market value at the time of the 24 purchase. 25 Note: Section 296 deals with the onus of proving matters under this 26 subsection. 27 130 Notice of disposal of collateral 28 (1) Unless subsection (5) of this section or section 144 applies, a 29 secured party who proposes to dispose of collateral on default by 30 the debtor (whether or not under section 128) must give a notice, in 31 accordance with this section, to: 32 (a) the grantor; and Personal Property Securities Bill 2009 No. , 2009 131
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 3 Disposing of collateral (including by purchasing collateral) Section 130 1 (b) any other secured party with a security interest in the 2 collateral that has a higher priority. 3 (2) A notice must: 4 (a) contain the name of the secured party giving the notice; and 5 (b) contain a description of the collateral; and 6 (c) state that the secured party proposes to dispose of the 7 collateral, unless an obligation is performed, or an amount is 8 paid, to satisfy the obligation secured by the security interest 9 in the collateral, on or before the day specified in accordance 10 with subsection (3); and 11 (d) state that the notice is given for the purposes of this Act; and 12 (e) if the secured party is proposing to dispose of the collateral 13 by purchase: 14 (i) contain details of rights of objection under Division 5; 15 and 16 (ii) contain the address to which a notice of objection may 17 be given under section 137; and 18 (f) contain any other matter required by the regulations for the 19 purposes of this subsection. 20 Note: The period under paragraph (c) may be extended by a court under 21 section 293. 22 (3) For the purposes of paragraph (2)(c), the day specified in a notice 23 given to a person: 24 (a) must be at least 10 business days after the day the notice is 25 given; or 26 (b) if the person has given a written notice to the secured party 27 specifying a shorter period to apply for the purposes of this 28 section--before the end of that period. 29 (4) The notice may be given in the approved form. 30 When notice is not required 31 (5) The secured party is not required to give a notice to any person 32 under subsection (1) if: 33 (a) the secured party believes on reasonable grounds that the 34 secured party was induced to enter into the relevant security 35 agreement by fraud on the part of the debtor or the grantor; or 132 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Disposing of collateral (including by purchasing collateral) Division 3 Section 131 1 (b) the secured party believes on reasonable grounds that the 2 collateral might perish before the end of 10 business days 3 after the day the collateral is seized; or 4 (c) the secured party believes on reasonable grounds that there 5 will be a material decline in the value of the collateral if it is 6 not disposed of immediately after the day the collateral is 7 seized; or 8 (d) the secured party believes on reasonable grounds that the 9 expense of preserving the collateral is disproportionately 10 large in relation to its value; or 11 (e) the collateral is foreign currency; or 12 (f) the collateral is to be disposed of in accordance with the 13 operating rules of a clearing and settlement facility. 14 131 Duty of secured party disposing of collateral to obtain market 15 value 16 A secured party who disposes of collateral under section 128 (other 17 than by purchasing the collateral) owes a duty, to any other person 18 with a security interest in the collateral, and to the grantor, 19 immediately before the disposal, to exercise all reasonable care: 20 (a) if the collateral has a market value at the time of disposal--to 21 obtain at least that market value; or 22 (b) otherwise--to obtain the best price that is reasonably 23 obtainable at the time of disposal, having regard to the 24 circumstances existing at that time. 25 Note: A different rule applies in relation to disposal by purchase (see 26 subsection 129(3)). 27 132 Secured party to give statement of account 28 Statement of account following disposal 29 (1) Unless section 144 applies, a secured party must, on request by any 30 other person with a security interest in the collateral, or the grantor, 31 give the person (or grantor) a written statement of account, if the 32 first-mentioned secured party disposes of collateral under 33 section 128 (including by purchasing the collateral in accordance 34 with section 129). Personal Property Securities Bill 2009 No. , 2009 133
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 3 Disposing of collateral (including by purchasing collateral) Section 132 1 (2) A statement of account under subsection (1) must be given to a 2 person before the end of: 3 (a) the period of 20 business days after the day the person 4 requests the statement; or 5 (b) such further period as is reasonable in the circumstances. 6 Note: The period may also be extended by a court under section 293. 7 (3) A statement of account under subsection (1) must show: 8 (a) in the case of a disposal by a lease or licence--the total 9 amount received, and expected to be received, during the 10 period: 11 (i) starting when the secured party seized the collateral; and 12 (ii) ending at the end of the lease or licence; and 13 (b) in any other case--the total amount received from the 14 disposal of the collateral (or in the case of disposal by 15 purchase, paid by the secured party) during the period: 16 (i) starting when the secured party seized the collateral; and 17 (ii) ending at the time of the disposal of the collateral; and 18 (c) in any case--the amount of expenses relating to the disposal; 19 and 20 (d) any amounts paid to other secured parties; and 21 (e) the balance owing by the secured party to the grantor, or by 22 the debtor to the secured party, as the case may be. 23 Statement of account if no disposal 24 (4) A secured party who has not disposed of collateral before the end 25 of 6 months after the day the collateral is seized must, in 26 accordance with subsections (5) and (6), give a written statement 27 of account for each period of 6 months after seizing the collateral, 28 until the collateral is disposed of. 29 (5) The statement of account for a 6 month period must be given to 30 any other person with a security interest in the collateral, or the 31 grantor, if the other person (or the grantor) requests the statement 32 for that period. 33 (6) A statement of account under subsection (4) must be given to a 34 person before the end of: 134 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Disposing of collateral (including by purchasing collateral) Division 3 Section 133 1 (a) the period of 20 business days after the day the person 2 requests the statement; or 3 (b) such further period as is reasonable in the circumstances. 4 Note: The period may also be extended by a court under section 293. 5 (7) A statement of account under subsection (4) must: 6 (a) state that the secured party has not disposed of the collateral; 7 and 8 (b) show the total amount received in relation to the collateral 9 during the period: 10 (i) starting when the secured party seized the collateral; and 11 (ii) ending at the time the statement is given; and 12 (c) show the amount of expenses relating to the retention of the 13 collateral before the disposal. 14 133 Disposing of collateral free of interests 15 (1) If collateral has been disposed of under section 128 (including by a 16 secured party purchasing the collateral), a person takes the 17 collateral as a result of the disposal free of all of the following 18 interests in the collateral: 19 (a) the interest of the grantor; 20 (b) the security interest of the secured party who disposed of the 21 collateral; 22 (c) all security interests in the collateral that have a lower 23 priority than the security interest of that secured party. 24 Note: If a person has a perfected security interest in the collateral that ranks 25 higher than that of the secured party, the person retains a security 26 interest in the collateral. 27 (2) Subsection (1) applies in relation to a disposal of collateral (other 28 than a disposal by a secured party purchasing the collateral) even if 29 the requirements of this Chapter have not been complied with. 30 Personal Property Securities Bill 2009 No. , 2009 135
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 4 Retaining collateral Section 134 1 Division 4--Retaining collateral 2 134 Proposal of secured party to retain collateral 3 (1) A secured party may retain collateral if the secured party has 4 seized the collateral in the exercise of a right to seize the collateral 5 on default by the debtor (whether under section 123 or otherwise). 6 Note 1: This section does not apply in relation to collateral that is used 7 predominantly for personal, domestic or household purposes (see 8 subsection 109(5)). 9 Note 2: The secured party may act as agent for the grantor in transferring title 10 (see section 141). 11 (2) However, the secured party may retain the collateral only if: 12 (a) the secured party gives a notice under section 135 to retain 13 the collateral; and 14 (b) no notice of objection is given to the secured party in 15 accordance with subsection 137(2). 16 135 Notice of retention of collateral 17 (1) A secured party (the retaining party) who proposes to retain 18 collateral under section 134 must (unless section 144 applies) give 19 a notice of the proposal, in accordance with this section, to: 20 (a) the grantor; and 21 (b) if the security interest of the retaining party is not a purchase 22 money security interest--a secured party who, at the time the 23 retaining party gives the notice, has a registration that 24 describes the collateral; and 25 (c) if the security interest of the retaining party is a purchase 26 money security interest--a secured party over whom (or 27 which) the retaining party has priority under section 62 or 63, 28 but only if, at the time the retaining party gives the notice, the 29 secured party has a registration that describes the collateral. 30 (2) The secured party must give a notice to a person: 31 (a) at least 10 business days before the day the first steps are 32 taken to retain the collateral; or 136 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Retaining collateral Division 4 Section 136 1 (b) if the person has given a written notice to the secured party 2 specifying a shorter period to apply for the purposes of this 3 section--before the end of that period. 4 Note: The period mentioned in paragraph (a) may be extended by a court 5 under section 293. 6 (3) A notice must: 7 (a) contain the name of the secured party giving the notice; and 8 (b) contain a description of the collateral; and 9 (c) state that the secured party proposes to retain the collateral, 10 unless an obligation is performed, or an amount is paid, as 11 mentioned in paragraph (d), on or before a specified day 12 (being a day that is at least 10 business days after the day the 13 notice is given); and 14 (d) state the obligation to be performed, or the amount of the 15 payment required, before the day specified in accordance 16 with paragraph (c), to satisfy the obligation secured by the 17 security interest in the collateral; and 18 (e) contain details of rights of objection under Division 5; and 19 (f) contain the address to which a notice of objection may be 20 given under section 137; and 21 (g) contain any other matter required by the regulations for the 22 purposes of this subsection. 23 (4) The notice may be given in the approved form. 24 136 Retaining collateral free of interests 25 Retaining collateral free of interests if notices have been given in 26 accordance with section 135 27 (1) If: 28 (a) a secured party gives one or more notices in accordance with 29 section 135 to retain collateral; and 30 (b) no notice of objection is given to the secured party in 31 accordance with subsection 137(2); 32 then, at the end of the day specified in accordance with paragraph 33 135(3)(c), the secured party is entitled to take steps to have title to 34 the collateral pass to the secured party. Personal Property Securities Bill 2009 No. , 2009 137
Chapter 4 Enforcement of security interests Part 4.3 Seizure and disposal or retention of collateral Division 4 Retaining collateral Section 136 1 (2) At the time the title to the collateral passes to the secured party, the 2 secured party takes the collateral free of all of the following 3 interests in the collateral: 4 (a) the interest of the grantor; 5 (b) the security interest of the secured party to whom title passes; 6 (c) all security interests that have a lower priority than the 7 security interest of that secured party. 8 Acquiring collateral that has been retained free of interests if 9 notices have not been given in accordance with section 135 10 (3) A person takes collateral free of the interests referred to in 11 subsection (2) if: 12 (a) a secured party is required to give one or more notices in 13 relation to the collateral in accordance with section 135; and 14 (b) the secured party has not done so; and 15 (c) the person acquires the collateral from the secured party for 16 new value; and 17 (d) the person has no actual knowledge that the requirements of 18 section 135 have not been complied with. 19 (4) Subsection (3) applies in relation to a security interest referred to in 20 paragraph (2)(c) whether or not a registration with respect to the 21 security interest is effective. 22 138 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Seizure and disposal or retention of collateral Part 4.3 Objection to purchase or retention Division 5 Section 137 1 Division 5--Objection to purchase or retention 2 137 Persons entitled to notice may object to proposal 3 (1) This section applies if: 4 (a) a person is entitled to a notice under section 130 or 135; and 5 (b) a secured party gives the person one of the following notices: 6 (i) a notice under section 130 that the secured party 7 proposes to purchase collateral; 8 (ii) a notice under section 135 that the secured party 9 proposes to retain collateral. 10 (2) Before the end of the day specified in accordance with subsection 11 130(3) or 135(3), the person may give the secured party a notice 12 (the notice of objection) objecting to the purchase or retention. 13 Note: The secured party may request the person to provide proof of the 14 person's interest under section 138. 15 (3) The secured party must sell or lease the collateral in accordance 16 with section 128 if the secured party is given a notice of objection 17 in accordance with subsection (2). 18 138 Person making objection may be requested by secured party to 19 prove interest 20 (1) A secured party who, in accordance with subsection 137(2), is 21 given a notice of objection by a person (other than the grantor) may 22 request the person to provide proof of that person's interest. 23 (2) The notice of objection is taken not to have been given by the 24 person in accordance with subsection 137(2) if the person does not 25 provide proof of the person's interest before the end of 10 business 26 days after the day the secured party's request is made. 27 Note: The period may be extended by a court under section 293. 28 Personal Property Securities Bill 2009 No. , 2009 139
Chapter 4 Enforcement of security interests Part 4.4 Rules applying after enforcement Section 139 1 Part 4.4--Rules applying after enforcement 2 3 139 Guide to this Part 4 This Part contains rules about steps to be taken after a security 5 interest in collateral has been enforced. 6 These rules deal with the following: 7 (a) the order of distribution of personal property or its 8 proceeds; 9 (b) the transfer of title to collateral; 10 (c) redemption of collateral, or the reinstatement of 11 security agreements, before disposal; 12 (d) when certain enforcement notices are not required. 13 140 Distribution of proceeds received by secured party 14 Scope 15 (1) This section applies if any amount, personal property or proceeds 16 (within the ordinary meaning of that term) of collateral is received 17 by or on behalf of a secured party as a result of enforcing a security 18 interest in collateral (whether or not under section 120 or 128). 19 Order of application 20 (2) The amount, personal property or proceeds must be applied in the 21 following order: 22 (a) obligations to persons holding interests (other than security 23 interests) in the collateral that have a higher priority (whether 24 under this Act or otherwise) than the interest of the secured 25 party; 26 Note: The interests referred to in this paragraph might be interests to 27 which this Act would otherwise not apply (see subsection 8(2)). 140 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Rules applying after enforcement Part 4.4 Section 140 1 (b) reasonable expenses incurred in relation to the enforcement 2 of security interests against the collateral, to the extent that 3 the expenses are secured by the security interests; 4 Note: Reasonable expenses in relation to the enforcement of a security 5 interest are taken to be secured by the security interest unless the 6 parties agree otherwise (see subsection 18(5)). 7 (c) obligations to persons holding security interests in the 8 collateral that have a higher priority (whether under this Act 9 or otherwise) than the interest of the secured party; 10 (d) obligations to the secured party that are secured by the 11 security interest in the collateral; 12 (e) obligations to persons holding interests or security interests 13 in the collateral that have a lower priority (whether under this 14 Act or otherwise) than the interest of the secured party; 15 (f) to the grantor. 16 Note: Sections 102 and 103 affect the operation of this section in relation to 17 commingled property. 18 (3) An amount, personal property or proceeds must be applied against 19 interests to which paragraph (2)(a), (c) or (e) applies in the order of 20 their priority (whether under this Act or otherwise). 21 (4) This section applies in relation to a security interest in collateral 22 even if a person takes the collateral free of the security interest 23 under section 133. 24 (5) An amount paid, or personal property or proceeds applied, in 25 accordance with subsection (2) discharges an obligation secured by 26 an interest in the collateral to the extent of the amount paid or the 27 value of the proceeds or property applied. 28 (6) To avoid doubt, any amount paid by the higher priority party to an 29 enforcing party in accordance with section 127 is, for the purposes 30 of this section, an expense incurred by the higher priority party in 31 relation to the enforcement of the security interest in the collateral. 32 (7) A secured party is not liable to an action, suit or proceeding in 33 relation to an application of proceeds in accordance with this 34 section if: 35 (a) the secured party applied the proceeds honestly; and Personal Property Securities Bill 2009 No. , 2009 141
Chapter 4 Enforcement of security interests Part 4.4 Rules applying after enforcement Section 141 1 (b) the secured party applied the proceeds in a commercially 2 reasonable manner. 3 141 Secured party may take steps to reflect transfer of title 4 A secured party who is entitled to dispose of, or retain, collateral 5 under section 128 or 134 may take any steps necessary to reflect 6 the transfer of title resulting from the disposal or retention, if the 7 grantor could take those steps to reflect a transfer of title to the 8 collateral. 9 142 Entitled persons may redeem collateral 10 (1) At any time before a secured party disposes of collateral under 11 section 128, any other person with a security interest in the 12 collateral, or the grantor, may redeem the collateral: 13 (a) by paying the amounts required to discharge the obligations, 14 or by performing the obligations, secured by security 15 interests in the collateral; and 16 (b) by paying the amount of any expenses in relation to the 17 enforcement of the security interest, the payment of which is 18 secured by the security interest. 19 Note: Reasonable expenses in relation to the enforcement of a security 20 interest are taken to be secured by a security interest unless the 21 parties agree otherwise (see subsection 18(5)). 22 (2) However, a person must not redeem collateral under subsection (1) 23 if the person agrees in writing after the default not to do so. 24 (3) The grantor's right to redeem the collateral has priority over any 25 other person's right to redeem the collateral. 26 143 Entitled persons may reinstate security agreement 27 (1) At any time before a secured party disposes of or retains collateral 28 (whether or not under this Chapter), a person may reinstate the 29 security agreement by: 30 (a) paying the following amounts: 31 (i) amounts in arrears (disregarding amounts in arrears as a 32 result of an acceleration clause in the security 33 agreement); 142 Personal Property Securities Bill 2009 No. , 2009
Enforcement of security interests Chapter 4 Rules applying after enforcement Part 4.4 Section 144 1 (ii) the amount of any expenses, in relation to the 2 enforcement of the security interest, the payment of 3 which is secured by the security interest; and 4 Note: Reasonable expenses in relation to the enforcement of a security 5 interest are taken to be secured by a security interest unless the 6 parties agree otherwise (see subsection 18(5)). 7 (b) remedying any other default as a result of which the secured 8 party proposes to dispose of, or retain, the collateral. 9 (2) A security agreement may be reinstated only once during the 10 period in which the security agreement is in force. 11 144 When certain enforcement notices are not required 12 A secured party is not required to give a notice to a person under 13 section 95, 118, 121, 130, 132 or 135, if: 14 (a) after having made reasonable attempts, the secured party has 15 failed to locate the person; or 16 (b) for the grantor--after the debtor defaults, the grantor waives 17 in writing the grantor's right to receive the notice; or 18 (c) for a person other than the grantor--the person (at any time) 19 waives in writing the person's right to receive the notice; or 20 (d) in any case--on an ex parte application in relation to the 21 person, a court is satisfied that a notice is not required for any 22 other reason. 23 Note: For which courts have jurisdiction, and for transfers between courts, 24 see Part 6.2. 25 Personal Property Securities Bill 2009 No. , 2009 143
Chapter 5 Personal Property Securities Register Part 5.1 Guide to this Chapter Section 145 1 Chapter 5--Personal Property Securities 2 Register 3 Part 5.1--Guide to this Chapter 4 5 145 Guide to this Chapter 6 This Chapter provides for the establishment and maintenance of a 7 register with respect to personal property securities and certain 8 prescribed personal property. 9 Part 5.2 deals with the establishment of the register and what it 10 contains. 11 Registrations consist of financing statements, and are amended by 12 the registration of financing change statements. Part 5.3 deals 13 with the registration of these statements, including the data to be 14 included and the issue of verification statements confirming their 15 registration. 16 Part 5.4 contains rules about the timing of registrations and when a 17 registration becomes ineffective, including the defects that make a 18 registration ineffective. 19 Part 5.5 is about searching the register. 20 Part 5.6 deals with the amendment of registrations after a demand 21 for amendment is made. 22 Part 5.7 deals with removal of data from the register and the 23 correction of registration errors. 24 Part 5.8 provides for fees for registration and searching the register, 25 the review of registration decisions and annual reports. 26 Part 5.9 establishes the offices of the Registrar of Personal 27 Property Securities and the Deputy Registrar. 144 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Establishment of the register Part 5.2 Section 146 1 Part 5.2--Establishment of the register 2 3 146 Guide to this Part 4 This Part sets up the Personal Property Securities Register. 5 The Registrar of Personal Property Securities is required to 6 establish and maintain the register, and ensure that it is kept 7 operational. However, the Registrar can refuse access to the 8 register, and suspend its operation, in certain circumstances. 9 The register contains the following: 10 (a) data in registrations with respect to security 11 interests and related data; 12 (b) prescribed data in relation to personal property. 13 147 Personal Property Securities Register 14 (1) The Registrar must establish and maintain a register to be known 15 as the Personal Property Securities Register. 16 (2) Data in the register is the property of the Commonwealth. 17 (3) The Registrar may keep the register in any form that he or she 18 considers appropriate. 19 (4) The Registrar must ensure that the register is operational at all 20 times, except: 21 (a) while access is refused, or its operation is suspended, under 22 subsection (5); or 23 (b) in other circumstances prescribed by the regulations. 24 (5) If the Registrar considers that it is not practical to provide access to 25 the register, the Registrar may: 26 (a) refuse access to the register; or 27 (b) otherwise suspend the operation of the register, in whole or in 28 part. Personal Property Securities Bill 2009 No. , 2009 145
Chapter 5 Personal Property Securities Register Part 5.2 Establishment of the register Section 148 1 (6) If the Registrar refuses access to the register, or otherwise suspends 2 the operation of the register in whole or in part, under 3 subsection (5), the Registrar must publish a notice giving details of 4 the refusal or other suspension of operation (including the period of 5 refusal or suspension): 6 (a) in a way prescribed by the regulations; or 7 (b) if regulations are not made for the purposes of 8 paragraph (a)--in the Gazette. 9 Note: The office of the Registrar of Personal Property Securities is 10 established under Part 5.9. 11 148 What the register contains 12 The register is to contain the following data: 13 (a) data in registrations; 14 (b) data (if any) prescribed by regulations made for the purposes 15 of this paragraph in relation to registrations, or possible 16 registrations; 17 (c) data (if any) in relation to personal property that is prescribed 18 by regulations made for the purposes of this paragraph. 19 Note: If personal property is prescribed by regulations for the purposes of 20 paragraph (c), this Act might not otherwise apply to interests in that 21 property (see subsection 8(2)). 22 146 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Registration Part 5.3 Section 149 1 Part 5.3--Registration 2 3 149 Guide to this Part 4 A person may apply to the Registrar to register a financing 5 statement, or a financing change statement, with respect to a 6 security interest or certain personal property. 7 A registration may perfect a security interest, which may give the 8 secured party an advantage under this Act in enforcing the interest. 9 A person must not make an application with respect to a security 10 interest unless the person believes on reasonable grounds that the 11 security interest is, or will be, held by a person stated in the 12 application to be a secured party. 13 This Part also deals with verification statements, which verify the 14 registration of financing statements and financing change 15 statements. 16 The Registrar is responsible for giving verification statements to 17 secured parties, who must give notice of the statements to grantors. 18 Publication may be used as an alternative to giving verification 19 statements. 20 150 Registration--on application 21 (1) A person may apply to the Registrar to register a financing 22 statement with respect to: 23 (a) a security interest; or 24 (b) personal property prescribed by regulations made for the 25 purposes of paragraph 148(c). 26 (2) A person may apply to the Registrar to register a financing change 27 statement to amend a registered financing statement. 28 (3) The Registrar must register the financing statement or financing 29 change statement in accordance with the application, but only if: Personal Property Securities Bill 2009 No. , 2009 147
Chapter 5 Personal Property Securities Register Part 5.3 Registration Section 151 1 (a) the application is in the approved form; and 2 (b) the fee (if any) determined under section 190 has been paid; 3 and 4 (c) the Registrar is not satisfied that the application is: 5 (i) frivolous, vexatious or offensive, or contrary to the 6 public interest; or 7 (ii) made in contravention of section 151 (belief that 8 collateral secures obligation); and 9 (d) the registration would not be prohibited by the regulations. 10 Note 1: Section 161 authorises the description of collateral by a registration 11 before or after a security agreement is made covering the collateral, or 12 a security interest has attached to the collateral. 13 Note 2: The Registrar must give a verification statement to each secured party 14 after the registration of a financing statement or a financing change 15 statement (see section 156). 16 Note 3: Application may be made to the Administrative Appeals Tribunal for 17 review of certain decisions of the Registrar about registration (see 18 section 191). 19 Note 4: The requirement to pay a fee is satisfied if an arrangement for its 20 payment has been approved under subsection 190(4). 21 151 Registration--belief that collateral secures obligation 22 Requirements for collateral to secure obligation etc. 23 (1) A person must not apply to register a financing statement, or a 24 financing change statement, that describes collateral, unless the 25 person believes on reasonable grounds that the collateral secures, 26 or will secure, an obligation (including a payment) owed by a 27 debtor to the person described in the statement as the secured party. 28 Civil penalty: 29 (a) for an individual--50 penalty units; 30 (b) for a body corporate--250 penalty units. 31 Note: See Part 6.3 (Civil penalty proceedings). 32 (2) If a financing statement, or a financing change statement, that 33 describes collateral has been registered on the application of a 34 person, the person must, within the period covered by 35 subsection (3), apply to register a financing change statement to 148 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Registration Part 5.3 Section 151 1 amend the registration to end its effect with respect to the 2 collateral, if: 3 (a) the collateral has never, since the statement was registered, 4 secured an obligation (including a payment) owed by a 5 debtor to the person stated in the registration to be the 6 secured party; and 7 (b) there are no reasonable grounds (or there are no longer any 8 reasonable grounds) for believing that the collateral secures, 9 or will secure, such an obligation. 10 Civil penalty: 11 (a) for an individual--50 penalty units; 12 (b) for a body corporate--250 penalty units. 13 Note: See Part 6.3 (Civil penalty proceedings). 14 (3) The period covered by this subsection is as soon as practicable, or 15 5 business days, whichever is earlier, after: 16 (a) if there never have been, since the statement was registered, 17 reasonable grounds for believing that the collateral secures, 18 or will secure, an obligation mentioned in paragraph (2)(a)-- 19 the day of the registration time, or the amendment time, for 20 the financing statement or financing change statement; or 21 (b) if there are no longer any reasonable grounds for that 22 belief--the day when there stopped being reasonable grounds 23 for the belief. 24 Note: The period of 5 business days may be extended by a court under 25 section 293. 26 (4) A person who wishes to establish that there were reasonable 27 grounds for the belief mentioned in subsection (1) or 28 paragraph (2)(b) (at any particular time) bears an evidential burden 29 in relation to the matter. 30 Note: For evidential burden, see section 10. 31 Damages for contravention of requirements 32 (5) For the purposes of section 271 (but without limiting that section): 33 (a) compliance with subsection (1) or (2) is taken to be an 34 obligation imposed on a person who applies, or is required to Personal Property Securities Bill 2009 No. , 2009 149
Chapter 5 Personal Property Securities Register Part 5.3 Registration Section 152 1 apply, for the registration of a financing statement or a 2 financing change statement; and 3 (b) any person with an interest in personal property described in 4 the financing statement or financing change statement is 5 taken to be a person to whom that obligation is owed; and 6 (c) a contravention of subsection (1) or (2) is taken to be a 7 failure to discharge that obligation. 8 Note: Section 271 gives a right to recover damages for any loss or damage in 9 relation to such a failure. 10 Registration unaffected by contravention 11 (6) However, if a person applies for a registration of a financing 12 statement or a financing change statement in contravention of 13 subsection (1), and the statement is registered accordingly, the 14 contravention does not affect the validity or effectiveness of the 15 registration. 16 Registrations with respect to security interests only 17 (7) This section only applies in relation to a registration with respect to 18 a security interest. 19 152 Registration--location of personal property and interested 20 persons outside Australia 21 A financing statement, or a financing change statement, may be 22 registered whether or not: 23 (a) the personal property to which the statement relates is located 24 in Australia; or 25 (b) any person who owns or has rights in that property is located 26 in Australia. 27 Note 1: For when personal property is located in Australia, see section 235. 28 For when bodies corporate, bodies politic or individuals are located in 29 Australia, see section 235. 30 Note 2: For security interests in personal property outside Australia, see 31 section 6. 150 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Registration Part 5.3 Section 153 1 153 Financing statements with respect to security interests 2 (1) A financing statement with respect to a security interest (including 3 such a financing statement as amended by the registration of a 4 financing change statement) consists of data that complies with the 5 following table: 6 Financing statements with respect to security interests Item Data about: Details of data 1 The secured party The details prescribed by the regulations, in relation to each secured party, of: (a) the secured party; or (b) a person nominated by the secured party who has authority to act on behalf of the secured party. 2 The grantor Whichever of the following is applicable: (a) if the collateral is consumer property, and is required by the regulations to be described by serial number--no grantor's details; (b) if the collateral is consumer property, and is not required by the regulations to be described by serial number--the grantor's name and date of birth, as evidenced in accordance with the regulations, and no other details; (c) in any other case--the grantor's details as prescribed by the regulations. 3 Giving of notices The following: (a) an address (including an email address or fax number) for the giving of notices to the secured party (or secured parties) relating to the registration; (b) details of any identifier provided for the giving of notices to the secured party (or secured parties). Note: For identifiers, see section 289. 4 The collateral and A collateral description in accordance with all of the proceeds following rules: (a) the collateral must be described as one of the following: (i) consumer property; (ii) commercial property; Personal Property Securities Bill 2009 No. , 2009 151
Chapter 5 Personal Property Securities Register Part 5.3 Registration Section 153 Financing statements with respect to security interests Item Data about: Details of data (b) the collateral may or must be described by serial number, if allowed or required by the regulations; (c) the collateral must belong to a single class of collateral prescribed by the regulations; (d) any description of proceeds must comply with the regulations. Note: 2 or more types of collateral that belong to different classes prescribed by the regulations must be described in separate registrations. However, 2 or more registrations can be effected through a single application. 5 The end time for For all the collateral described in the statement, the registration following data: (a) for collateral other than consumer property or property described by a serial number: (i) no stated end time; or (ii) an end time for the registration no later than the time (the default time) that is the end of the day 25 years after the registration time; or (iii) if the registration is amended to include or change (but not omit) an end time--an amended end time for the registration no later than the time (the default time) that is the end of the day 25 years after the amendment time for that amendment; (b) for consumer property, or property described by a serial number: (i) an end time for the registration no later than the time (the default time) that is the end of the day 7 years after the registration time; or (ii) if the registration is amended to change the end time--an amended end time for the registration no later than the time (the default time) that is the end of the day 7 years after the amendment time for that amendment. 6 Subordination An indication of whether the security interest is (or is to be) subordinated to any other security interest. 152 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Registration Part 5.3 Section 154 Financing statements with respect to security interests Item Data about: Details of data However, this indication need not be included. 7 Security interest An indication of whether the security interest is, or is to be, a purchase money security interest (to any extent) if the security interest is in respect of a class of collateral prescribed by the regulations for the purposes of this item. 8 Any matter Details of the matter prescribed by the regulations, prescribed by the whether or not the matter also comes under any of the regulations other items in this table. 1 (2) If a person applies to register a financing statement (or a financing 2 change statement) that would otherwise result in the statement of 3 an end time in a financing statement not complying with item 5 of 4 the table in subsection (1), the financing statement is taken to 5 provide for the relevant default time mentioned in that item as the 6 stated end time. 7 (3) A statement of end time does not comply with item 5 of the table in 8 subsection (1) if it states an end time earlier than the registration 9 time or amendment time in relation to the financing statement or 10 financing change statement that provided for that end time. 11 154 Financing statements with respect to prescribed property 12 A financing statement with respect to personal property prescribed 13 by regulations made for the purposes of paragraph 148(c) 14 (including such a financing statement as amended by the 15 registration of a financing change statement) consists of data that 16 complies with the following table: 17 Financing statements with respect to prescribed property Item Data about: Details of data 1 The person who Details of the person, as prescribed by the regulations. owns or has an interest in the property 2 The property Details relating to the property in accordance with the Personal Property Securities Bill 2009 No. , 2009 153
Chapter 5 Personal Property Securities Register Part 5.3 Registration Section 155 Financing statements with respect to prescribed property Item Data about: Details of data following rules: (a) the property must be of a single class, described in the registration; (b) a statement must be included of the reason why the property is registered. 3 Any matter Details of the matter prescribed by the regulations, prescribed by the whether or not the matter also comes under any of the regulations other items in this table. 1 155 Meanings of verification statement and registration event 2 In this Act: 3 verification statement means a written statement in the approved 4 form: 5 (a) verifying the registration of a financing statement or a 6 financing change statement (each of which is a registration 7 event) with respect to a security interest, other than a 8 financing change statement registered under section 185 9 (removal of old data) or 186 (incorrectly removed data); and 10 (b) including other data (if any) approved by the Registrar for 11 that form in relation to the registration event, a secured party, 12 a grantor, or collateral. 13 156 Verification statements--Registrar to give to secured parties 14 (1) The Registrar must ensure that a verification statement in relation 15 to a registration event is given to the following persons: 16 (a) a person registered as a secured party in the registration 17 immediately before the time of the registration event; 18 (b) a person registered as a secured party in the registration 19 immediately after the time of the registration event. 20 Note: This section does not apply in relation to a registration event if the 21 Registrar publishes a verification statement in relation to the event 22 under section 158. 23 (2) If a registration event involves the amendment of a registration to 24 change an address (including an email address or a fax number) for 154 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Registration Part 5.3 Section 157 1 the giving of notices to a secured party, the Registrar must ensure 2 that the verification statement is given to the secured party at both 3 the previously registered address and the address as changed. 4 (3) If a registration event involves the amendment of a registration to 5 omit a secured party, the Registrar must ensure that the verification 6 statement in relation to the event is given to the secured party at the 7 previously registered address for the secured party. 8 157 Verification statements--secured parties to give notice to 9 grantors 10 Requirement to provide verification statement 11 (1) A person (the statement holder) who is, under section 156, given a 12 verification statement in relation to a registration event concerning 13 a registration, must ensure that a notice of the statement, in the 14 approved form, is given to the following persons as soon as 15 reasonably practicable after the time of the registration event: 16 (a) a person registered as a grantor in the registration 17 immediately before the time of the registration event; 18 (b) a person registered as a grantor in the registration 19 immediately after the time of the registration event. 20 Note: This section does not apply in relation to a registration event if the 21 Registrar publishes a verification statement in relation to the event 22 under section 158. 23 (2) Without limiting subsection (1), the approved form for notice of a 24 verification statement: 25 (a) may authorise specified data in the verification statement not 26 to be included in the notice; but 27 (b) must otherwise require the data in the verification statement 28 to be included in the notice. 29 Exception--waiver by interested person of right to receive notice 30 (3) However, this section does not apply in relation to a person 31 mentioned in paragraph (1)(a) or (b) if: 32 (a) the collateral to which the registration event relates is 33 (immediately before or after the event) described in the 34 registration as commercial property; and Personal Property Securities Bill 2009 No. , 2009 155
Chapter 5 Personal Property Securities Register Part 5.3 Registration Section 158 1 (b) the person has, in writing, waived the right under this section 2 to receive a notice in relation to registration events to which 3 paragraph (a) applies. 4 Contravention of requirement 5 (4) If the statement holder contravenes subsection (1), the 6 contravention constitutes an act or practice involving interference 7 with the privacy of the individual for the purposes of section 13 of 8 the Privacy Act 1988. 9 Note 1: These acts or practices may be the subject of complaints under 10 section 36 of that Act. 11 Note 2: If a statement holder fails to discharge an obligation under this 12 section, an action for damages may be available under section 271. 13 158 Verification statements--publication as alternative 14 (1) The Registrar may publish, in a way prescribed by the regulations, 15 a single verification statement in relation to a number of 16 registration events if: 17 (b) the events affect a number of persons registered as secured 18 parties (whether before or after the events); and 19 (b) the Registrar considers that it would be inconvenient for 20 verification statements to be given to each registered (or 21 formerly registered) secured party. 22 (2) Sections 156 and 157 do not apply in relation to a registration 23 event if the Registrar publishes a verification statement in relation 24 to the event under this section. 25 156 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 When a registration is effective Part 5.4 Section 159 1 Part 5.4--When a registration is effective 2 3 159 Guide to this Part 4 This Part provides for the time at which a description of collateral 5 is registered. The precise timing of a registration may be 6 significant in determining the priority to be given to a security 7 interest in the collateral (see section 55). 8 This Part also deals with when a registration is effective and 9 registration defects that may cause it to become ineffective. 10 A registration is effective from the registration time until the 11 earliest of: 12 (a) the registered end time; or 13 (b) an amendment time; or 14 (c) the time when the registration stops being available 15 for search in the register. 16 A registration is only ineffective because of a defect if there is a 17 seriously misleading defect in data relating to the registration, or 18 one of a number of particular defects set out in section 165 exists. 19 If a security interest in certain property becomes unperfected, the 20 secured party may be obliged to take steps to end the effect of the 21 registration. 22 160 Registration time--general 23 (1) A description of collateral starts to be registered in a registration 24 with respect to a security interest, in relation to a particular secured 25 party, at the moment (the registration time) when the description 26 becomes available for search in the register in relation to that 27 secured party. 28 Note 1: A written search result is evidence of a registration and of the 29 registration time (see section 174). Personal Property Securities Bill 2009 No. , 2009 157
Chapter 5 Personal Property Securities Register Part 5.4 When a registration is effective Section 161 1 Note 2: A registration may stop being effective even if it is available for 2 search in the register (for example, because of a defect--see 3 section 164). 4 Note 3: If 2 or more registrations describe the same collateral in relation to the 5 same secured party, there may be different registration times for the 6 collateral in relation to each of the registrations. 7 (2) The amendment time for an amendment to a registration is the 8 moment when the amended registration becomes available for 9 search in the register. 10 161 Registration time--security agreements and interests 11 Personal property may be described in a registration with respect to 12 a security interest before or after: 13 (a) a security agreement is made covering the property; or 14 (b) a security interest attaches to the property. 15 162 Registration time--transfers 16 A financing statement, or a financing change statement, may be 17 registered to reflect the transfer of a security interest, or of 18 collateral, before or after the transfer. 19 163 Effective registration 20 (1) A registration with respect to a security interest that describes 21 particular collateral, in relation to a secured party, is effective with 22 respect to that collateral from the registration time for the 23 description of the collateral until the earliest of the following times: 24 (a) the end time (if any) registered for the collateral; 25 (b) if the registration is amended to omit the collateral 26 description--the amendment time; 27 (c) the time when the description of the collateral in the 28 registration stops being available for search in the register (by 29 reference to that time) in respect of the secured party. 30 Note: For the registration time for collateral, see section 160. 31 (2) This section is subject to sections 164, 165 and 166 (defects in 32 registration). 158 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 When a registration is effective Part 5.4 Section 164 1 164 Defects in registration--general rule 2 (1) A registration with respect to a security interest that describes 3 particular collateral is ineffective because of a defect in the register 4 if, and only if, there exists: 5 (a) a seriously misleading defect in any data relating to the 6 registration; or 7 (b) a defect mentioned in section 165. 8 (2) In order to establish that a defect is seriously misleading, it is not 9 necessary to prove that any person was actually misled by it. 10 (3) A registration that describes particular collateral is not ineffective 11 only because the registration is ineffective with respect to other 12 collateral described in the registration. 13 165 Defects in registration--particular defects 14 For the purposes of paragraph 164(1)(b), a defect in a registration 15 that describes particular collateral exists at a particular time if any 16 of the following circumstances exist: 17 (a) in a case in which the collateral is required by the regulations 18 to be described by serial number in the register--no search of 19 the register by reference to that time, and by reference only to 20 the serial number of the collateral, is capable of disclosing 21 the registration; 22 (b) in a case in which the collateral is not required by the 23 regulations to be described by serial number in the register-- 24 no search of the register by reference to that time, and by 25 reference only to the grantor's details (required to be 26 included in the registered financing statement under 27 section 153), is capable of disclosing the registration; 28 (c) if the registered financing statement (as amended, if at all) 29 indicates that the security interest in relation to the collateral 30 is a purchase money security interest (to any extent)--the 31 security interest is not a purchase money security interest (to 32 any extent) in relation to the collateral; 33 (d) in any case--circumstances in relation to the data related to 34 the registration that are prescribed by the regulations. Personal Property Securities Bill 2009 No. , 2009 159
Chapter 5 Personal Property Securities Register Part 5.4 When a registration is effective Section 166 1 166 Defects in registration--temporary effectiveness 2 Scope 3 (1) This section applies if: 4 (a) one of the following defects in a registration that describes 5 particular collateral arises at a particular time (the defect 6 time): 7 (i) a defect mentioned in paragraph 165(a) or (d); 8 (ii) a defect mentioned in paragraph 165(b), other than a 9 defect resulting from a change of the grantor in relation 10 to the collateral; and 11 (b) the defect does not arise only because of an irregularity, 12 omission or error in a financing statement or a financing 13 change statement. 14 Example: A defect mentioned in paragraph 165(a) may occur if there is a change 15 in the serial number under which collateral is required to be described 16 in the register. For example, a patent may be required to be described 17 by serial number (a Patent Application Number or a Patent Number). 18 The Patent Application Number may be changed to a Patent Number 19 when the patent is registered on the patents register. 20 Note: A change of the grantor may occur if the collateral described in the 21 registration is transferred. In this case, the secured party's security 22 interest may be temporarily perfected for a certain period (see 23 section 34). 24 Registration is temporarily unaffected by the defect 25 (2) Despite sections 164 and 165, the defect does not make the 26 registration ineffective for the period starting at the defect time and 27 ending at the earliest of the following times: 28 (a) the end time for the registration (as registered immediately 29 before the defect time); 30 (b) the end of the month that is 60 months after the defect time; 31 (c) the end of 5 business days after the day the secured party 32 acquires actual or constructive knowledge of the defect. 33 Note: The period mentioned in paragraph (c) may be extended by a 34 court under section 293. 160 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 When a registration is effective Part 5.4 Section 167 1 Registration becomes ineffective 2 (3) However, the registration becomes ineffective with respect to the 3 collateral under sections 164 and 165 because of the defect 4 immediately after the earliest time mentioned in subsection (2), 5 unless, at or before that time, the registration is amended to correct 6 the defect. 7 167 Security interest in certain property becomes unperfected 8 Scope 9 (1) This section applies in relation to a registration with respect to a 10 security interest if: 11 (a) collateral described in the registration is: 12 (i) used, or intended to be used, predominantly for 13 personal, domestic or household purposes; or 14 (ii) registered with a serial number (see subsection (3)); and 15 (b) a security interest in the collateral that was perfected by the 16 registration becomes unperfected at a particular time (the 17 unperfection time); and 18 (c) the end time for the registration is a time more than 5 19 business days after the day the unperfection time occurs. 20 Requirement to end effective registration 21 (2) The secured party must, before the end of 5 business days after the 22 day the unperfection time occurs, apply to register a financing 23 change statement under section 150 amending the registration to 24 end its effect. 25 Note 1: The period may be extended by a court under section 293. 26 Note 2: If the secured party fails to discharge the obligation under this section, 27 an action for damages may be available under section 271. 28 When collateral is registered with a serial number 29 (3) For the purposes of this section, collateral is registered with a serial 30 number at a particular time only if a search of the register by 31 reference to that time and by reference only to the serial number of 32 the collateral is capable of disclosing the registration. Personal Property Securities Bill 2009 No. , 2009 161
Chapter 5 Personal Property Securities Register Part 5.4 When a registration is effective Section 168 1 168 Maintenance fees 2 (1) The Registrar may give a secured party in respect of a registration 3 with respect to a security interest a written notice requiring the 4 secured party to pay the fee (determined under section 190) stated 5 in the notice within 28 days after the notice is given in order to 6 maintain the effectiveness of the registration. 7 (2) If the fee is not paid within 28 days after the notice is given, the 8 Registrar may register a financing change statement amending the 9 registration to end its effect. 10 Note 1: The Registrar must give a verification statement to each secured party 11 after the registration of a financing change statement (see section 156). 12 Note 2: Application may be made to the Administrative Appeals Tribunal for 13 review of certain decisions of the Registrar about registration (see 14 section 191). 15 Note 3: The requirement to pay a fee is satisfied if an arrangement for its 16 payment has been approved under subsection 190(4). 17 162 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Searching the register Part 5.5 Section 169 1 Part 5.5--Searching the register 2 3 169 Guide to this Part 4 This Part is about searching and accessing data on the register. 5 Anyone may search the register for data with respect to a security 6 interest or personal property. Searches can only be undertaken by 7 reference to certain criteria, for example the details of a grantor, or 8 a serial number. 9 A search by reference to an individual grantor's details, and the use 10 of data obtained by a search, is only authorised if the search is 11 undertaken for a purpose stated in this Part. 12 A civil penalty applies in respect of unauthorised searches, and 13 damages may be available (under section 271). In addition, an 14 unauthorised search may be investigated under the Privacy Act 15 1988. 16 The written search results may be used as evidence in a court or 17 tribunal. 18 A person may apply to obtain: 19 (a) copies of registered financing statements and 20 verification statements; and 21 (b) reports of certain matters relating to registered data 22 in relation to the person. 23 170 Search--general 24 (1) A person may apply to the Registrar to search the register for data 25 with respect to: 26 (a) a security interest; or 27 (b) personal property prescribed by regulations made for the 28 purposes of paragraph 148(c). Personal Property Securities Bill 2009 No. , 2009 163
Chapter 5 Personal Property Securities Register Part 5.5 Searching the register Section 171 1 (2) The Registrar must: 2 (a) give the person access to the register to search for the data, in 3 accordance with the application; and 4 (b) if, in the application, the person requests a written search 5 result in relation to the data--ensure that the person is able to 6 obtain a written search result in relation to the data, in the 7 appropriate form under section 174. 8 (3) However, the Registrar may give the person access to the register 9 to search for the data only if: 10 (a) the search is authorised under sections 171 and 172; and 11 (b) the application is in the approved form; and 12 (c) the person pays the fee determined under section 190; and 13 (d) access to the data is not prohibited by the regulations. 14 Note 1: Application may be made to the Administrative Appeals Tribunal for 15 review of the Registrar's decision under this section to refuse to give a 16 person access to the register to search for data (see section 191). 17 Note 2: The requirement to pay a fee is satisfied if an arrangement for its 18 payment has been approved under subsection 190(4). 19 171 Search--criteria 20 (1) A person may search the register by reference to the following 21 criteria: 22 (a) a grantor's details (as required to be included, if at all, in a 23 registered financing statement under section 153); 24 (b) a serial number by which collateral may (or must) be 25 described in the register; 26 (c) the time of the search; 27 (d) an earlier nominated time, but only with the consent of the 28 Registrar; 29 (e) any other criteria prescribed by the regulations. 30 Note: If a registration is no longer effective, details of the registration 31 can still be found by searching the register by reference to an 32 earlier time when the registration was still effective (see 33 paragraph (e)). However, data removed from the register may not 34 be available for search by reference to an earlier time (see 35 Part 5.7). 164 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Searching the register Part 5.5 Section 172 1 (2) The Registrar must ensure that the way in which the results of a 2 search are worked out in response to an application for the search 3 is determined in accordance with any regulations made for the 4 purposes of this subsection. 5 172 Search--by reference to details of grantor who is an individual 6 Scope 7 (1) This section applies if a person proposes to search the register by 8 reference to the details of a grantor (other than that person) who is 9 an individual. 10 Restriction on who may search 11 (2) The following table sets out which persons (searchers) may search 12 the register, and for what purpose: 13 Who may search the register, and for what purpose Item Searchers Purpose 1 A person (the first person), or To disclose any registration in which another person with the first the first person is registered as a person's consent grantor or a secured party. 2 A secured party in relation to a A purpose that relates to a security registration interest attached to collateral described in the registration. 3 A grantor in relation to a registration A purpose that relates to a security interest attached to the collateral described in the registration. 4 A person To disclose any registration in which the person is registered as a secured party. 5 A person To disclose whether collateral to which a security interest is attached is described in a registration. 6 A person To disclose whether or not personal property is described in a registration, if: (a) the property is to be purchased or Personal Property Securities Bill 2009 No. , 2009 165
Chapter 5 Personal Property Securities Register Part 5.5 Searching the register Section 172 Who may search the register, and for what purpose Item Searchers Purpose dealt with by the person; or (b) the person has an interest in the property. 7 A person To establish whether to provide credit to, or obtain a guarantee or an indemnity from, a person named in the search application or a person with an interest in the personal property described in the application. 8 A person To establish whether to provide credit to, or obtain a personal guarantee or an indemnity from an associate (within the meaning of section 11 or subsection 12(2) of the Corporations Act 2001) of a body corporate named in the search application or of a body corporate with an interest in the personal property described in the application. 9 A person To establish whether to invest in, with, or through, a person named in the search application. 10 A person To establish whether to invest in, with, or through, an associate (within the meaning of section 11 or subsection 12(2) of the Corporations Act 2001) of a body corporate named in the search application or of a body corporate with an interest in the personal property described in the application. 11 The Registrar A purpose that relates to the administration of this Act. 12 A person who has taken control of A purpose that relates to the the property of an individual who is searcher's control of the property. insolvent under administration, 166 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Searching the register Part 5.5 Section 172 Who may search the register, and for what purpose Item Searchers Purpose within the meaning of the Corporations Act 2001 13 An Official Receiver in Bankruptcy A purpose that relates to the exercise within the meaning of the of a power, or the performance of a Bankruptcy Act 1966 function, of that Official Receiver in Bankruptcy. 14 The legal personal representative of A purpose that relates to the exercise an individual (including a deceased of a power, or the performance of a individual) function, as legal personal representative. 15 A government entity within the A purpose that relates to the exercise meaning of the A New Tax System of a power, or the performance of a (Australian Business Number) Act function, of that entity, unless the 1999 purpose is covered by another purpose listed in this table. 16 A government entity within the A purpose that relates to the meaning of the A New Tax System maintenance of the law, including (Australian Business Number) Act the prevention, detection, 1999 investigation or prosecution of contraventions of laws (whether the penalty for contravention is criminal or civil). 17 The holder of a lien or charge, or a A purpose that relates to the creditor enforcement of the lien or charge, or the creditor's rights, as the case may be. 18 A bailiff, or sheriff, of a court of the A purpose that relates to the Commonwealth, a State or a enforcement of a court order or Territory warrant. 19 A person To advise another person in connection with any of the purposes referred to in this table. 1 Search otherwise than for authorised purpose 2 (3) A searcher mentioned in an item in the table in subsection (2) must 3 not, otherwise than for the purpose specified in the item: 4 (a) search the register; or Personal Property Securities Bill 2009 No. , 2009 167
Chapter 5 Personal Property Securities Register Part 5.5 Searching the register Section 173 1 (b) use data obtained as a result of searching the register, unless 2 the searcher has also obtained the data lawfully from another 3 source. 4 Civil penalty: 5 (a) for an individual--50 penalty units; 6 (b) for a body corporate--250 penalty units. 7 Note: See Part 6.3 (Civil penalty proceedings). 8 (4) A person who wishes to establish that a searcher mentioned in an 9 item in the table in subsection (2) did an action mentioned in 10 paragraph (3)(a) or (b) for the purpose specified in the item bears 11 an evidential burden in relation to the matter. 12 Note: For evidential burden, see section 10. 13 (5) The Registrar may do either or both of the following: 14 (a) investigate a suspected contravention of subsection (3); 15 (b) decline to investigate, or to investigate further, a suspected 16 contravention of subsection (3). 17 Recovery of damages for contravention 18 (6) For the purposes of section 271: 19 (a) compliance with subsection (3) is taken to be an obligation 20 imposed on a person who searches the register, or uses data 21 obtained as a result of searching the register; and 22 (b) the obligation is taken to be owed to the grantor by reference 23 to whose details the search is undertaken; and 24 (c) a contravention of subsection (3) is taken to be a failure to 25 discharge that obligation. 26 Note: Section 271 gives a right to recover damages for any loss or damage in 27 relation to such a failure. 28 173 Search--interference with privacy 29 Scope 30 (1) This section applies if: 168 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Searching the register Part 5.5 Section 174 1 (a) a person obtains access to the register and searches the 2 register for data (whether or not the access is obtained as a 3 result of an application under section 170); and 4 (b) as a result of the search, the person obtains personal 5 information about an individual within the meaning of that 6 Act. 7 Unauthorised search or use of personal information is an 8 interference with privacy 9 (2) If the search, or the use of the personal information, is 10 unauthorised under subsection (3) or (4), the search or use 11 constitutes an act or practice involving interference with the 12 privacy of the individual for the purposes of section 13 of the 13 Privacy Act 1988. 14 Note: These acts or practices may be the subject of complaints under 15 section 36 of that Act. 16 (3) The search is unauthorised if: 17 (a) the search is not authorised under section 171; or 18 (b) the search is prohibited under subsection 172(3); or 19 (c) access to the data for a search of that kind is prohibited by 20 regulations made for the purposes of paragraph 170(3)(d). 21 (4) The use of the personal information is unauthorised (unless the 22 data has been obtained lawfully from another source) if: 23 (a) the search is not authorised under section 171; or 24 (b) the use of the personal information is prohibited under 25 subsection 172(3); or 26 (c) access to the data for a search of that kind is prohibited by 27 regulations made for the purposes of paragraph 170(3)(d). 28 174 Search--written search results and evidence etc. 29 Search result as evidence 30 (1) A written search result in the appropriate form (see subsection (3)) 31 is admissible as evidence in a court or tribunal and is, in the 32 absence of evidence to the contrary, proof of the matters stated in 33 the search result. Personal Property Securities Bill 2009 No. , 2009 169
Chapter 5 Personal Property Securities Register Part 5.5 Searching the register Section 174 1 (2) Without limiting subsection (1), the matters that may be stated in a 2 search result include the following: 3 (a) the registered description of collateral at a particular time; 4 (b) the time of the registration of a financing statement, any 5 financing change statement and the end time for a 6 registration; 7 (c) in relation to 2 or more registrations--the order of any of the 8 times mentioned in paragraph (b) for all the registrations. 9 Appropriate form of search result 10 (3) A search result is in the appropriate form if: 11 (a) it purports to be issued by the Registrar in the approved form; 12 or 13 (b) it purports to be issued by one of the following: 14 (i) an officer or agency of the Commonwealth authorised 15 by the Registrar; 16 (ii) an officer or agency of a State or Territory authorised by 17 the Registrar; or 18 (c) it purports to be: 19 (i) issued by a person prescribed by the regulations; and 20 (ii) if the Registrar approves a form for the purposes of this 21 subparagraph--in the approved form. 22 (4) The Registrar may include, or may authorise to be included, in a 23 search result, any data determined by the Registrar in relation to a 24 secured party, a grantor, or collateral. 25 Evidence of transient electronic communications etc. 26 (5) If a search result is covered by paragraph (b) of the definition of 27 writing in section 10, evidence of the search result may be given 28 by the production of a recording of the search result mentioned in 29 that paragraph. 30 Instruments of approval 31 (6) The Registrar may, by written instrument, authorise an officer or 32 agency for the purposes of subparagraph (3)(b)(i) or (ii). 170 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Searching the register Part 5.5 Section 175 1 (7) The Registrar may, by legislative instrument, determine data for 2 the purposes of subsection (4). 3 175 Copy of financing statement 4 On application by a person in the approved form, accompanied by 5 the fee (if any) determined under section 190, the Registrar may 6 give the person: 7 (a) a copy of any registered financing statement (as amended by 8 any registered financing change statement) in relation to 9 which the person is registered as a secured party; or 10 (b) a copy of a verification statement that relates to such a 11 registered financing statement. 12 Note 1: Application may be made to the Administrative Appeals Tribunal for 13 review of the Registrar's decision under this section to refuse to give a 14 person a copy of a registered financing statement or verification 15 statement (see section 191). 16 Note 2: The requirement to pay a fee is satisfied if an arrangement for its 17 payment has been approved under subsection 190(4). 18 176 Reports by Registrar 19 Reports about particular persons 20 (1) On application by a person in the approved form, accompanied by 21 the fee (if any) determined under section 190, the Registrar may 22 give the person a report of matters determined under subsection (3) 23 relating to registered data in relation to the person. 24 Note 1: Application may be made to the Administrative Appeals Tribunal for 25 review of the Registrar's decision under this section to refuse to give a 26 person a report (see section 191). 27 Note 2: The requirement to pay a fee is satisfied if an arrangement for its 28 payment has been approved under subsection 190(4). 29 (2) The Registrar may, at the Registrar's initiative, give a person a 30 report of matters relating to registered data in relation to the person 31 (whether or not the matters are determined under subsection (3)). 32 (3) The Registrar may, by legislative instrument, determine matters 33 that may be the subject of reports under this section. Personal Property Securities Bill 2009 No. , 2009 171
Chapter 5 Personal Property Securities Register Part 5.5 Searching the register Section 176 1 Reports for the purposes of the administration of this Act 2 (4) For the purposes of the administration of this Act, the Registrar 3 may prepare a report of any matter relating to registered data. 4 172 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Amendment demands Part 5.6 Introduction Division 1 Section 177 1 Part 5.6--Amendment demands 2 Division 1--Introduction 3 177 Guide to this Part 4 A person with an interest in collateral may require changes to the 5 registration, by way of an amendment demand given to the 6 secured party. 7 An amendment demand may be made if: 8 (a) the obligation owed by a debtor to the secured 9 party is not secured by collateral described in the 10 registration; or 11 (b) the particular collateral in which the person has an 12 interest does not secure any obligation owed by a 13 debtor to the secured party. 14 An amendment demand, if not voluntarily complied with, may be 15 pursued by an administrative process activated by the Registrar, or 16 by an application to a court. The secured party may also apply to a 17 court to oppose an amendment demand. 18 178 How amendment demands are given 19 (1) A person with an interest (including a security interest) in collateral 20 described in a registration with respect to a security interest may 21 give a demand (an amendment demand), in writing, to the secured 22 party for a financing change statement to be registered to amend 23 the registration as authorised by the following table: 24 Note: If the secured party does not comply with the amendment demand, the 25 demand may be enforced under Subdivision A (administrative 26 process) or Subdivision B (judicial process) of Division 3. 27 Personal Property Securities Bill 2009 No. , 2009 173
Chapter 5 Personal Property Securities Register Part 5.6 Amendment demands Division 1 Introduction Section 178 Authorised amendments Item When amendment is authorised What amendment is authorised 1 No collateral described in the Amendment to end effective registration secures any obligation registration (including an (including a payment) owed by a amendment to remove the debtor to the secured party. registration). 2 The particular collateral in which the Amendment to omit the collateral. person has an interest does not secure any obligation (including a payment) owed by a debtor to the secured party. 1 (2) Data removed from the register because of an amendment in 2 compliance with the amendment demand must not be made 3 available for search in the register by reference to any time before 4 (or after) the time of removal, if the Registrar so decides for the 5 purposes of this subsection. 6 Note 1: Application may be made to the Administrative Appeals Tribunal for 7 review of the Registrar's decision that the removed data is not to be 8 made available for search in the register (see section 191). 9 Note 2: Incorrectly removed data may be restored under section 186. 10 (3) A secured party must not require payment for compliance with an 11 amendment demand in relation to collateral that is consumer 12 property. 13 174 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Amendment demands Part 5.6 Amendment demands: administrative and judicial process Division 2 Section 179 1 Division 2--Amendment demands: administrative and 2 judicial process 3 Subdivision A--Administrative process 4 179 Scope of Subdivision 5 (1) This Subdivision applies if: 6 (a) a secured party is given an amendment demand; and 7 (b) an application has not been made to register a financing 8 change statement in compliance with the demand before the 9 end of 5 business days after the day the demand is given to 10 the secured party; and 11 (c) there are no proceedings currently before a court (including a 12 court of appeal), in relation to an application under 13 section 182, that relate to the amendment demanded. 14 (2) This Subdivision stops applying if: 15 (a) a financing change statement is registered in accordance with 16 the amendment demand; or 17 (b) proceedings come before a court (including a court of 18 appeal), in relation to an application under section 182, that 19 relate to the amendment demanded. 20 No application to security trust instruments 21 (3) This Division does not apply in relation to a security interest if the 22 security agreement providing for the interest is an instrument or 23 other document: 24 (a) by which a person issues or guarantees, or provides for the 25 issue or guarantee of, an obligation secured by a security 26 interest; and 27 (b) in which another person is appointed as trustee for the person 28 to whom the obligation secured by the security interest is 29 owed. Personal Property Securities Bill 2009 No. , 2009 175
Chapter 5 Personal Property Securities Register Part 5.6 Amendment demands Division 2 Amendment demands: administrative and judicial process Section 180 1 180 Administrative process--amendment notices 2 Amendment notice given by Registrar 3 (1) The Registrar may give the secured party a notice (an amendment 4 notice), in accordance with subsection (5), of the amendment 5 demanded. 6 At the initiative of the Registrar 7 (2) An amendment notice may be given at the initiative of the 8 Registrar, if the Registrar suspects on reasonable grounds that the 9 amendment demanded is authorised under section 178. 10 In response to a statement by the person who gave the amendment 11 demand 12 (3) The person who gave the amendment demand to the secured party 13 may give a statement in the approved form to the Registrar: 14 (a) stating the amendment demanded; and 15 (b) including anything else prescribed by the regulations. 16 Note: The provision of false or misleading information in the statement may 17 be an offence against Part 7.4 of the Criminal Code. 18 (4) An amendment notice must be given in response to a statement 19 under subsection (3) as soon as practicable after the statement is 20 given (unless an amendment notice has already been given at the 21 initiative of the Registrar). 22 Amendment notices 23 (5) An amendment notice is given in accordance with this subsection 24 if: 25 (a) the notice is in the approved form; or 26 (b) the notice: 27 (i) states the amendment demanded; and 28 (ii) invites the secured party to submit a response to the 29 amendment demand in writing to the Registrar before 30 the end of 5 business days after the day the notice is 31 given (or an extended period approved by the 32 Registrar); and 176 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Amendment demands Part 5.6 Amendment demands: administrative and judicial process Division 2 Section 181 1 (iii) sets out the effect of section 181 (amendment of 2 registration); and 3 (iv) if a statement is given under subsection (3)--includes a 4 copy of the statement. 5 Note: The provision of false or misleading information in any response to 6 the invitation may be an offence against Part 7.4 of the Criminal 7 Code. 8 181 Administrative process--registration amendments 9 (1) If an amendment notice is given to a secured party under 10 section 180, after the end of the period covered by subsection (3), 11 the Registrar must (at his or her initiative) register a financing 12 change statement amending the registration (including an 13 amendment to remove the registration) in accordance with the 14 amendment demand, unless the Registrar suspects on reasonable 15 grounds that the amendment is not authorised under section 178. 16 (2) However, the Registrar may register such a financing change 17 statement before the end of the period covered by subsection (3) if: 18 (a) the secured party has responded to the invitation in the 19 amendment notice; and 20 (b) the Registrar has no reason to believe that the secured party 21 intends to give a further response. 22 (3) The period covered by this subsection is: 23 (a) 5 business days after the day the amendment notice is given 24 to the secured party; or 25 (b) a longer period approved by the Registrar (in relation to the 26 particular amendment demand, or to a class of amendment 27 demands) after the amendment notice is given to the secured 28 party. 29 (4) In making a decision about whether to register a financing change 30 statement amending the registration in accordance with the 31 amendment demand, the Registrar must consider: 32 (a) the response (if any) of the secured party to the invitation in 33 the amendment notice; and 34 (b) any other relevant information. Personal Property Securities Bill 2009 No. , 2009 177
Chapter 5 Personal Property Securities Register Part 5.6 Amendment demands Division 2 Amendment demands: administrative and judicial process Section 182 1 (5) Data removed from the register because of an amendment under 2 this section must not be made available for search in the register by 3 reference to any time before (or after) the time of removal, if the 4 Registrar so decides for the purposes of this subsection. 5 Note 1: The provision of false or misleading information in any response to 6 the invitation may be an offence against Part 7.4 of the Criminal 7 Code. 8 Note 2: The Registrar must give a verification statement to each secured party 9 after the registration of a financing change statement (see section 156). 10 Note 3: Application may be made to the Administrative Appeals Tribunal for 11 review of certain decisions of the Registrar about registration (see 12 section 191). 13 Note 4: This section stops applying if proceedings come before a court under 14 section 182 in relation to the amendment demanded (see subsection 15 179(2)). 16 Note 5: Incorrectly removed data may be restored under section 186. 17 Subdivision B--Judicial process 18 182 Judicial process for considering amendment demand 19 (1) The following persons may apply to a court for an order in relation 20 to an amendment demand: 21 (a) the secured party; 22 (b) the person who gave the amendment demand. 23 (2) The person who gave the amendment demand cannot make an 24 application under this section before the end of 5 business days 25 after the day the demand is given to the secured party. 26 Note: The period may be extended by a court under section 293. 27 (3) A person with an interest (including a security interest) in the 28 collateral described in the registration has the right to appear before 29 the court on an application under this section. 30 Note 1: The Registrar also has the power to intervene in the proceeding (see 31 section 218). 32 Note 2: For which courts have jurisdiction, and for transfers between courts, 33 see Part 6.2. 34 (4) On an application under this section, a court may make the 35 following orders: 178 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Amendment demands Part 5.6 Amendment demands: administrative and judicial process Division 2 Section 182 1 (a) if the court considers the amendment demanded to be 2 authorised under section 178--an order requiring the 3 Registrar to register a financing change statement amending 4 the registration (including an amendment to remove the 5 registration); 6 (b) if the court does not consider the amendment demanded to be 7 so authorised--one or more of the following orders: 8 (i) an order restraining the Registrar from registering a 9 financing change statement amending the registration at 10 the Registrar's initiative (under section 181); 11 (ii) an order restraining the person who gave the 12 amendment demand from making such further 13 amendment demands as the court specifies; 14 (iii) an order restraining the Registrar from giving the 15 secured party amendment notices under section 180 in 16 relation to such further amendment demands as the 17 court specifies; 18 (c) any other order that the court thinks fit. 19 (5) The Registrar must comply with a court order to register a 20 financing change statement as soon as reasonably practicable after 21 receiving the order. 22 Note: The Registrar must give a verification statement to each secured party 23 after the registration of a financing change statement (see section 156). 24 (6) Data removed from the register because of an amendment under 25 this section must not be made available for search in the register by 26 reference to any time before (or after) the time of removal, if the 27 Registrar so decides. 28 Note: Incorrectly removed data may be restored under section 186. 29 Personal Property Securities Bill 2009 No. , 2009 179
Chapter 5 Personal Property Securities Register Part 5.7 Removal of data and correction of registration errors Section 183 1 Part 5.7--Removal of data and correction of 2 registration errors 3 4 183 Guide to this Part 5 The Registrar may remove data in certain situations, for example if 6 its retention is contrary to the public interest. 7 The Registrar may also remove old data, restore removed data and 8 correct errors or omissions made by the Registrar. 9 184 Removal of data--general grounds 10 (1) The Registrar may (at his or her initiative) register a financing 11 change statement to remove data (including an entire registration) 12 from the register if the Registrar is satisfied that: 13 (a) the application to register the data was frivolous or vexatious, 14 the data is offensive, or the retention of the data in the 15 register is contrary to the public interest; or 16 (b) the registration of the data is prohibited by regulations made 17 for the purposes of paragraph 150(3)(d); or 18 (c) the removal of the data is required or permitted by the 19 regulations made for the purposes of this paragraph; or 20 (d) the application to register the data was not made in the 21 approved form; or 22 (e) the removal is required urgently: 23 (i) in the public interest; or 24 (ii) for reasons prescribed by regulations made for the 25 purposes of this subparagraph. 26 Note 1: The Registrar must give a verification statement to each secured party 27 after the data is removed (see section 156). 28 Note 2: Application may be made to the Administrative Appeals Tribunal for 29 review of the Registrar's decision to remove data from the register 30 under paragraph (a), (b) or (c) (see section 191). 180 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Removal of data and correction of registration errors Part 5.7 Section 185 1 (2) Data removed from the register under this section must not be 2 made available for search in the register by reference to any time 3 before (or after) the time of removal: 4 (a) in relation to data removed under paragraph (1)(a), (b) or 5 (c)--if the Registrar so decides for the purposes of this 6 paragraph; and 7 (b) in relation to data removed under paragraph (1)(d)--if the 8 Registrar so decides for the purposes of this paragraph; 9 (c) in relation to data removed under paragraph (1)(e)--in all 10 cases. 11 Note: Application may be made to the Administrative Appeals Tribunal for 12 review of the Registrar's decision under paragraph (a) (see 13 section 191). 14 (3) If subsection (2) applies in relation to data removed from the 15 register, this Act otherwise applies as if the data is not, and never 16 has been, included in the register. 17 Note: Incorrectly removed data may be restored under section 186. 18 185 Removal of data--registration ineffective for 7 years or more 19 The Registrar may (at his or her initiative) register a financing 20 change statement to remove data (including an entire registration) 21 with respect to a security interest from the register to reflect the 22 fact that the registration has been ineffective under section 163 for 23 7 years or more. 24 186 Incorrectly removed data--restoration 25 (1) The Registrar may (at his or her initiative) register a financing 26 change statement to restore data to the register (including an entire 27 registration) if it appears to the Registrar that the data was 28 incorrectly removed from the register under this Act. 29 (2) If data is restored to the register under subsection (1), for the 30 purposes of this Act the data is taken never to have been removed 31 from the register. Personal Property Securities Bill 2009 No. , 2009 181
Chapter 5 Personal Property Securities Register Part 5.7 Removal of data and correction of registration errors Section 187 1 187 Records of removed data 2 The removal of data from the register under this Act does not 3 prevent the Registrar from keeping a record of the removed data in 4 whatever form the Registrar considers appropriate. 5 188 Correction of registration errors 6 (1) The Registrar may (at his or her initiative) register a financing 7 change statement to amend a registration to correct an error or 8 omission made by the Registrar. 9 (2) If a registration is corrected under subsection (1), this Act applies 10 as if the error or omission had never been made. 11 Note 1: The Registrar must give a verification statement to each secured party 12 after the registration of a financing change statement (see section 156). 13 Note 2: Application may be made to the Administrative Appeals Tribunal for 14 review of the Registrar's decision to register a financing change 15 statement (see section 191). 16 182 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Fees, administrative review and annual reports Part 5.8 Section 189 1 Part 5.8--Fees, administrative review and annual 2 reports 3 4 189 Guide to this Part 5 This Part provides for fees for registration and searching the 6 register, the review of registration decisions and the obligation of 7 the Registrar to prepare annual reports on the operation of this Act. 8 190 Registration and search fees 9 Determination of fees and arrangements 10 (1) The Minister may, by legislative instrument, determine fees for the 11 purposes of this Act. 12 (2) The Minister may, by a legislative instrument made under 13 subsection (1), determine the kinds of arrangements for the 14 payment of fees under the instrument that may be approved under 15 subsection (4). 16 (3) If this Act requires the payment of a determined fee for a particular 17 purpose, without limiting subsection (6), that requirement is 18 satisfied if an arrangement for its payment has been approved 19 under subsection (4). 20 Approval of arrangements 21 (4) The Registrar may approve an arrangement (of a kind determined 22 under subsection (2)) in relation to the payment of fees by a person 23 for the purposes of this section on application by the person in the 24 approved form, accompanied by the fee (if any) determined under 25 subsection (1). 26 Miscellaneous 27 (5) The fees determined under subsection (1) must not be such as to 28 amount to taxation. Personal Property Securities Bill 2009 No. , 2009 183
Chapter 5 Personal Property Securities Register Part 5.8 Fees, administrative review and annual reports Section 191 1 (6) The amount of a fee, except a fee to maintain a registration 2 (determined for the purposes of section 168), is a debt due to the 3 Commonwealth, and may be recovered by the Commonwealth by 4 application to a court. 5 Note 1: If a fee to maintain a registration is not paid within 28 days, the 6 Registrar may end the effective registration of the collateral (see 7 section 168). 8 Note 2: For which courts have jurisdiction, and for transfers between courts, 9 see Part 6.2. 10 191 Review of decisions 11 An application may be made to the Administrative Appeals 12 Tribunal for review of the following decisions made by the 13 Registrar: 14 (a) a decision to refuse to register a financing statement, under 15 subsection 150(1); 16 (b) a decision to refuse to register a financing change statement, 17 under subsection 150(2); 18 (c) a decision to register a financing change statement to amend 19 the register to end the effect of a registration, under 20 subsection 150(2); 21 (d) a decision to refuse to give a person access to the register to 22 search for data, under section 170; 23 (e) a decision to refuse to give a person a copy of a registered 24 financing statement in relation to which the person is 25 registered as a secured party, or of a verification statement, 26 under section 175; 27 (f) a decision to refuse to give a person a report relating to 28 registered data in relation to the person, under subsection 29 176(1); 30 (g) a decision to register a financing change statement in 31 accordance with an amendment demand, under subsection 32 181(1); 33 (h) a decision to refuse to register a financing change statement 34 in accordance with an amendment demand, under subsection 35 181(1); 36 (i) a decision to register a financing change statement to remove 37 data from the register, under paragraph 184(1)(a), (b) or (c); 184 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Fees, administrative review and annual reports Part 5.8 Section 192 1 (j) a decision that data removed from the register is not to be 2 made available for search in the register, under subsection 3 178(2) or 181(5) or paragraph 184(2)(a); 4 (k) a decision to register a financing change statement to restore 5 incorrectly removed data to the register, under section 186; 6 (l) a decision to register a financing change statement to amend 7 a registration to correct an error or omission made by the 8 Registrar, under section 188; 9 (m) a decision to register a financing change statement to remove 10 migrated data from the register, under subsection 334(2). 11 192 Annual reports 12 (1) The Registrar must, as soon as practicable after the end of each 13 financial year, prepare and give to the Minister, for presentation to 14 the Parliament, a report on the operation of this Act during that 15 financial year. 16 Note: See also section 34C of the Acts Interpretation Act 1901, which 17 contains extra rules about annual reports. 18 (2) The Registrar must include in the report: 19 (a) details of each occasion on which access to the register was 20 refused, or the operation of the register was otherwise 21 suspended, during the financial year under subsection 147(5); 22 and 23 (b) any information necessary to demonstrate that fees 24 determined under subsection 190(1) do not amount to 25 taxation. 26 Personal Property Securities Bill 2009 No. , 2009 185
Chapter 5 Personal Property Securities Register Part 5.9 Registrar of Personal Property Securities Section 193 1 Part 5.9--Registrar of Personal Property Securities 2 3 193 Guide to this Part 4 This Part establishes the offices of the Registrar of Personal 5 Property Securities and the Deputy Registrar. 6 Both are appointed by the Minister and engaged under the Public 7 Service Act 1999. 8 The Part also includes provision for the delegation of the 9 Registrar's powers. 10 194 Registrar--establishment of office 11 (1) There is to be a Registrar of Personal Property Securities. 12 (2) The Registrar is to be: 13 (a) engaged under the Public Service Act 1999; and 14 (b) appointed as Registrar of Personal Property Securities by the 15 Minister by written instrument. 16 (3) The office of the Registrar of Personal Property Securities is not a 17 public office for the purposes of the Remuneration Tribunal Act 18 1973. 19 195 Registrar--functions and powers 20 (1) The Registrar has the functions given under this Act or any other 21 Act. 22 (2) The Registrar has power to do all things necessary or convenient to 23 be done for or in connection with the performance of his or her 24 functions. 25 196 Registrar--acting appointments 26 (1) The Minister may, by written instrument, appoint a person engaged 27 under the Public Service Act 1999 to act as the Registrar: 186 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Registrar of Personal Property Securities Part 5.9 Section 197 1 (a) during a vacancy in the office of Registrar (whether or not an 2 appointment has previously been made to the office); or 3 (b) during any period, or during all periods, when the Registrar: 4 (i) is absent from duty or from Australia; or 5 (ii) is, for any reason, unable to perform the duties of the 6 office. 7 (2) Anything done by, or in relation to, a person purporting to act 8 under an appointment is not invalid merely because: 9 (a) the occasion for the appointment had not arisen; or 10 (b) there was a defect or irregularity in connection with the 11 appointment; or 12 (c) the appointment had ceased to have effect; or 13 (d) the occasion to act had not arisen or had ceased. 14 Note: For general provisions about appointments, see also sections 20 and 15 33A of the Acts Interpretation Act 1901. 16 197 Registrar--delegation 17 (1) The Registrar may, by written instrument, delegate all or any of his 18 or her functions or powers to: 19 (a) a person engaged under the Public Service Act 1999; or 20 (b) another person determined by the Registrar, by written 21 instrument, for the purposes of this section. 22 Note: The Registrar may determine a particular person or a class of persons 23 under paragraph (b), and may apply the determination in relation to 24 particular matters or classes of matters (see subsection 33(3A) of the 25 Acts Interpretation Act 1901). 26 (2) A delegate must, if required by the instrument of delegation, 27 perform a delegated function, or exercise a delegated power, under 28 the direction or supervision of: 29 (a) the Registrar; or 30 (b) a Deputy Registrar; or 31 (c) a person engaged under the Public Service Act 1999. 32 Note: For further provisions relating to delegations, see sections 34AA and 33 34AB of the Acts Interpretation Act 1901. Personal Property Securities Bill 2009 No. , 2009 187
Chapter 5 Personal Property Securities Register Part 5.9 Registrar of Personal Property Securities Section 198 1 198 Registrar--resignation 2 (1) The Registrar may resign by writing signed by him or her and 3 given to the Minister. 4 (2) The resignation takes effect on the day it is received by the 5 Minister or, if a later day is specified in the resignation, on that 6 later day. 7 199 Registrar--termination 8 (1) The Minister may terminate the appointment of the Registrar by 9 written instrument. 10 (2) The appointment of the Registrar is terminated if the Registrar 11 stops being engaged under the Public Service Act 1999 for any 12 reason. 13 200 Deputy Registrar--establishment of office 14 (1) There is to be at least one Deputy Registrar of Personal Property 15 Securities (a Deputy Registrar). 16 (2) A Deputy Registrar is to be: 17 (a) engaged under the Public Service Act 1999; and 18 (b) appointed as a Deputy Registrar of Personal Property 19 Securities by the Minister by written instrument. 20 (3) The office of Deputy Registrar of Personal Property Securities is 21 not a public office for the purposes of the Remuneration Tribunal 22 Act 1973. 23 201 Deputy Registrar--functions and powers 24 (1) Subject to any direction by the Registrar, a Deputy Registrar has all 25 the functions and powers of the Registrar, except the powers of 26 delegation under section 197. 27 (2) A function or power of the Registrar, when performed or exercised 28 by a Deputy Registrar, is taken to have been performed or 29 exercised by the Registrar. 188 Personal Property Securities Bill 2009 No. , 2009
Personal Property Securities Register Chapter 5 Registrar of Personal Property Securities Part 5.9 Section 202 1 (3) The performance of a function, or the exercise of a power, of the 2 Registrar by a Deputy Registrar does not prevent the performance 3 of the function, or the exercise of the power, by the Registrar. 4 (4) If the performance (or exercise) of a function or power by the 5 Registrar is dependent on the opinion, belief or state of mind of the 6 Registrar in relation to a matter, that function or power may be 7 performed (or exercised) by a Deputy Registrar on his or her 8 opinion, belief or state of mind in relation to that matter. 9 (5) If the operation of a provision of this Act or another Act is 10 dependent on the opinion, belief or state of mind of the Registrar in 11 relation to a matter, that provision may operate on the opinion, 12 belief or state of mind of a Deputy Registrar in relation to that 13 matter. 14 202 Deputy Registrar--resignation 15 (1) A Deputy Registrar may resign by writing signed by him or her 16 and given to the Minister. 17 (2) The resignation takes effect on the day it is received by the 18 Minister or, if a later day is specified in the resignation, on that 19 later day. 20 203 Deputy Registrar--termination 21 (1) The Minister may terminate the appointment of a Deputy Registrar 22 by written instrument. 23 (2) The appointment of a Deputy Registrar is terminated if the Deputy 24 Registrar stops being engaged under the Public Service Act 1999 25 for any reason. 26 Personal Property Securities Bill 2009 No. , 2009 189
Chapter 6 Judicial proceedings Part 6.1 Guide to this Chapter Section 204 1 Chapter 6--Judicial proceedings 2 Part 6.1--Guide to this Chapter 3 4 204 Guide to this Chapter 5 This Chapter deals with the role of the courts in proceedings that 6 relate to security interests in personal property. 7 Part 6.2 is about judicial proceedings generally. 8 Part 6.3 deals with proceedings for contravention of a civil penalty 9 provision. 10 190 Personal Property Securities Bill 2009 No. , 2009
Judicial proceedings Chapter 6 Judicial proceedings generally Part 6.2 Introduction Division 1 Section 205 1 Part 6.2--Judicial proceedings generally 2 Division 1--Introduction 3 205 Guide to this Part 4 This Part is about judicial proceedings in a court with respect to 5 matters arising under this Act or in relation to a security agreement 6 or a security interest. 7 Jurisdiction is conferred on the Federal Court, the Federal 8 Magistrates Court, courts of States and Territories and the Family 9 Court. PPS matters can be transferred between courts in 10 accordance with procedures set out in this Part. 11 The Registrar may intervene in judicial proceedings. 12 206 Scope of this Part 13 (1) This Part deals with the jurisdiction of a court with respect to a 14 matter (a PPS matter): 15 (a) arising under a provision of this Act authorising an 16 application to be made to a court; or 17 (b) otherwise arising in relation to this Act, other than a matter in 18 respect of which the Federal Court or the Federal Magistrates 19 Court has jurisdiction under the Administrative Decisions 20 (Judicial Review) Act 1977; or 21 (c) otherwise arising in relation to a security agreement or a 22 security interest. 23 (2) This Part operates to the exclusion of: 24 (a) the Jurisdiction of Courts (Cross-vesting) Act 1987; and 25 (b) section 39B of the Judiciary Act 1903. 26 (3) This Part does not limit the operation of the provisions of the 27 Judiciary Act 1903 other than section 39B. Personal Property Securities Bill 2009 No. , 2009 191
Chapter 6 Judicial proceedings Part 6.2 Judicial proceedings generally Division 1 Introduction Section 206 1 (4) Without limiting subsection (3), this Part does not limit the 2 operation of subsection 39(2) of the Judiciary Act 1903 in relation 3 to matters arising under this Act. 4 (5) Nothing in this Part affects any other jurisdiction of any court. 5 (6) This Part does not apply to matters arising under Part 6.3 (civil 6 penalty proceedings). 7 192 Personal Property Securities Bill 2009 No. , 2009
Judicial proceedings Chapter 6 Judicial proceedings generally Part 6.2 Conferral of jurisdiction Division 2 Section 207 1 Division 2--Conferral of jurisdiction 2 207 Jurisdiction of courts 3 Jurisdiction is conferred on a court mentioned in an item in the 4 following table with respect to a PPS matter, subject to the limits 5 on the court's jurisdiction (if any) specified in the item: 6 Jurisdiction of courts Item Court on which jurisdiction is Limits of jurisdiction conferred 1 The Federal Court No specified limits. 2 The Federal Magistrates Court The court does not have jurisdiction to award an amount for loss or damage that exceeds: (a) $750,000; or (b) if another amount is prescribed by the regulations--that other amount. 3 A superior court, or lower court, of a The court's general jurisdictional State or Territory limits, including (but not limited to) limits as to locality and subject matter, to the extent that the Constitution permits. 4 The Family Court No specified limits. 7 208 Cross-jurisdictional appeals 8 The following table has effect: 9 Cross-jurisdictional appeals Item Unless expressly provided by a to any of the following courts: law of the Commonwealth, a State or a Territory, an appeal with respect to a PPS matter does not lie from a decision of ... 1 the Federal Court (a) the Federal Magistrates Court; (b) a court of a State; Personal Property Securities Bill 2009 No. , 2009 193
Chapter 6 Judicial proceedings Part 6.2 Judicial proceedings generally Division 2 Conferral of jurisdiction Section 208 Cross-jurisdictional appeals Item Unless expressly provided by a to any of the following courts: law of the Commonwealth, a State or a Territory, an appeal with respect to a PPS matter does not lie from a decision of ... (c) a court of a Territory; (d) the Family Court. 2 the Federal Magistrates Court (a) a court of a State; (b) a court of a Territory. 3 a court of a State (other than a State (a) the Federal Court; Family Court) (b) the Federal Magistrates Court; (c) a court of another State; (d) a court of a Territory; (e) the Family Court; (f) a State Family Court of the same State. 4 a court of the Australian Capital (a) the Federal Court; Territory (b) the Federal Magistrates Court; (c) a court of a State; (d) a court of another Territory; (e) the Family Court. 5 a court of the Northern Territory (a) the Federal Court; (b) the Federal Magistrates Court; (c) a court of a State; (d) a court of another Territory; (e) the Family Court. 6 a court of an external Territory (a) the Federal Magistrates Court; (b) a court of a State; (c) a court of another Territory (whether internal or external); (d) the Family Court. 7 the Family Court (a) the Federal Court; (b) the Federal Magistrates Court; (c) a court of a State; (d) a court of a Territory. 194 Personal Property Securities Bill 2009 No. , 2009
Judicial proceedings Chapter 6 Judicial proceedings generally Part 6.2 Conferral of jurisdiction Division 2 Section 209 Cross-jurisdictional appeals Item Unless expressly provided by a to any of the following courts: law of the Commonwealth, a State or a Territory, an appeal with respect to a PPS matter does not lie from a decision of ... 8 a State Family Court (a) the Federal Court; (b) the Federal Magistrates Court; (c) the Supreme Court of the same State; (d) a court of another State; (e) a court of a Territory. 1 209 Courts to act in aid of each other 2 In PPS matters, all of the following must severally act in aid of, 3 and be auxiliary to, each other: 4 (a) courts on which jurisdiction is conferred under this Part; 5 (b) officers of, or under the control of, those courts. 6 Personal Property Securities Bill 2009 No. , 2009 195
Chapter 6 Judicial proceedings Part 6.2 Judicial proceedings generally Division 3 Transfers between courts Section 210 1 Division 3--Transfers between courts 2 210 Application of this Division 3 Scope 4 (1) This Division applies if all the following conditions are satisfied: 5 (a) a proceeding with respect to a PPS matter is pending, or has 6 come, before a court (the transferring court) on which 7 jurisdiction is conferred under this Part in relation to the 8 matter; 9 (b) jurisdiction is also conferred on another court (the receiving 10 court) under this Part with respect to either of the following 11 (the transfer matter): 12