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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
Overview of Bill
The object of this Bill is to refer certain matters relating to security interests in
personal property to the Commonwealth Parliament so as to enable the
Commonwealth Parliament to make laws about those matters. The proposed Act will
be enacted for the purposes of section 51 (xxxvii) of the Constitution of the
Commonwealth, which enables State Parliaments to refer matters to the
Commonwealth Parliament.Summary of the operation of the Bill
The Bill operates by reference to the text of the proposed Personal Property
Securities Bill 2009 of the Commonwealth tabled in the Legislative Assembly of
New South Wales. This text is defined in the Bill to be the tabled text. Because the
proposed Commonwealth Bill contains matters that are not within the legislative
competence of the States, the Bill also contains a definition of initial referred
provisions, which means the tabled text to the extent to which that text deals with
matters that are included in the legislative powers of the Parliament of the State.The Bill refers to the Commonwealth Parliament the matters to which the initial
referred provisions relate, but only to the extent of the making of laws with respect
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to those matters by including the initial referred provisions in a Commonwealth Act
enacted in the terms, or substantially in the terms, of the tabled text. The Bill defines
this reference to be the initial reference and the Commonwealth Act enacted
pursuant to it to be the Commonwealth PPS Act.The Bill also refers certain matters (the referred PPS matters) in relation to different
kinds of personal property so as to enable the Commonwealth to make amendments
to the Commonwealth PPS Act from time to time concerning security interests in
those kinds of property. Each of these references is defined in the Bill to be an
amendment reference. The amendment references relate to the following kinds of
personal property:
(a) personal property (other than fixtures and water rights),
(b) fixtures (which are goods, other than crops, that are affixed to land),
(c) transferable water rights (which are certain transferable rights, entitlements or
authorities, whether or not exclusive, that are granted by or under the common
law or legislation of the State in relation to the control, use or flow of water).The Bill provides for exclusions from the referred PPS matters that are intended to
limit the power of the Commonwealth Parliament to use an amendment reference to
exclude or limit the power of the State to administer, vary and abrogate any State
statutory rights (such as licences) that it creates from time to time.The Bill will enable each of the amendment references to be commenced at different
times. For example, the amendment references in relation to fixtures and transferable
water rights will be able to be commenced after the Commonwealth has enacted an
Act pursuant to the initial reference. The Bill also provides for the termination of the
initial reference and also for the termination of any or all of the amendment
references.
Outline of provisions
Clause 1 sets out the name (also called the short title) and the purpose of the
proposed Act.Clause 2 provides for the commencement of the provisions of the proposed Act
(other than proposed section 6 (2), (3) and (4)) on the date of assent to the proposed
Act. Proposed section 6 (2), (3) and (4) (which make the amendment references to
the Commonwealth Parliament) will commence on a day or days appointed by
proclamation of the Governor.Clause 3 defines certain terms and expressions used in the proposed Act, including
the following.The expression law of the State is defined to mean any Act of the State or any
instrument made under such an Act, whenever enacted or made and as in force from
time to time. The expression is intended to cover both existing and future Acts and
instruments as enacted, made and amended from time to time.The expression excluded State statutory right is defined to mean a right, entitlement
or authority that is granted by or under a law of the State (which is referred to in the
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Personal Property Securities (Commonwealth Powers) Bill 2009
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proposed Act as a State statutory right) that is declared by that law not to be personal
property for the purposes of the Commonwealth PPS Act. As a result of the
ambulatory nature of the definition of law of the State referred to above, the
expression will extend to declarations that are made in relation to both existing and
future State statutory rights.The expression express amendment is defined to mean the direct amendment of the
text of the Commonwealth PPS Act, but as not including enactment of a provision
having substantive effect otherwise than as part of the text of that Act. Each of the
amendment references is limited to the express amendment of the Commonwealth
PPS Act. This ensures that the matters covered by the amendment references cannot
be the source of power for other Commonwealth legislation.The expression personal property is defined to mean property (including a licence)
other than:
(a) land, or
(b) an excluded State statutory right.The term licence is defined to mean either of the following:
(a) a transferable right, entitlement or authority to do one or more of the
following:(i) to manufacture, produce, sell, transport or otherwise deal with personal
property,
(ii) to provide services,
(iii) to explore for, exploit or use a resource,
(b) a transferable authority to exercise rights comprising intellectual property.The term licence, however, does not include any excluded State statutory right.
Clause 4 defines the expression referred PPS matters in relation to personal
property that is the subject of the different amendment references under the proposed
Act. The expression is defined to mean:
(a) the matter of security interests in the personal property, and
(b) without limiting the generality of paragraph (a), each of the following matters:(i) the recording of security interests, or information with respect to
security interests, in the personal property in a register,
(ii) the recording in such a register of any other information with respect to
the personal property (whether or not there are any security interests in
the personal property),
(iii) the enforcement of security interests in the personal property (including
priorities to be given as between security interests, and as between
security interests and other interests, in the personal property).
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The proposed section, however, excludes from the expression the matter of making
provision with respect to personal property or interests in personal property in a
manner that excludes or limits the operation of a law of the State to the extent that
the law makes provision with respect to:
(a) the creation, holding, transfer, assignment, disposal or forfeiture of a State
statutory right, or
(b) limitations, restrictions or prohibitions concerning the kinds of interests that
may be created or held in, or the kinds of persons or bodies that may create or
hold interests in, a State statutory right, or
(c) without limiting the generality of paragraph (a) or (b)—any of the following
matters:(i) the forfeiture of property or interests in property (or the disposal of
forfeited property or interests) in connection with the enforcement of
the general law or any law of the State,
(ii) the transfer, by operation of that law of the State, of property or interests
in property from any specified person or body to any other specified
person or body (whether or not for valuable consideration or a fee or
other reward).Paragraphs (a) and (b) of the above exclusions from the referred PPS matters are
intended to limit the power of the Commonwealth Parliament to use an amendment
reference to exclude or limit the power of the State to administer, vary and abrogate
any State statutory rights (such as licences) that it creates from time to time.Paragraph (c) of the above exclusions from the referred PPS matters is intended,
among other things, to preserve the operation of laws of the State that provide for the
confiscation of the proceeds of crimes or for the transfer by or under a law of the State
of assets from defunct bodies.Clause 5 defines the expression security interest in personal property. Generally
speaking, a security interest in personal property is an interest in relation to the
property provided for by a transaction that, in substance, secures payment or
performance of an obligation (without regard to the form of the transaction or the
identity of the person who has title to the property). However, the proposed section
also makes it clear that a security interest may encompass certain other interests
provided for by a transaction regardless of whether or not the transaction secures
payment or performance of an obligation. An example of such an interest is an
interest of a lessee or bailor under a lease or bailment of goods.Clause 6 deals with the references described in the Overview. Clause 6 (1), (2), (3)
and (4) make the references.Clause 6 (1) provides for the inclusion of the referred provisions in a Commonwealth
Act enacted in the terms, or substantially in the terms, of the tabled text. The
expression “substantially in the terms” of the tabled text will enable minor
adjustments to be made to the tabled text.
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Clause 6 (2) in effect refers matters to the Commonwealth Parliament in connection
with the future amendment of the Commonwealth PPS Act concerning security
interests in personal property (other than fixtures or water rights).Clause 6 (3) in effect refers matters to the Commonwealth Parliament in connection
with the future amendment of the Commonwealth PPS Act concerning security
interests in fixtures.Clause 6 (4) in effect refers matters to the Commonwealth Parliament in connection
with the future amendment of the Commonwealth PPS Act concerning security
interests in transferable water rights (other than excluded State statutory rights).Clause 6 (5) removes a possible argument that one of the references might be limited
by any of the other references (except as provided by clause 6 (2), which excludes
fixtures and water rights from the reference made by that proposed subsection).Clause 6 (6) makes it clear that the reference of a matter has effect only to the extent
that the matter is not otherwise within the legislative power of the Commonwealth
Parliament and to the extent that the matter is within the legislative power of the State
Parliament.Clause 6 (7) makes it clear that the State Parliament envisages that the
Commonwealth PPS Act can be amended or affected by Commonwealth legislation
enacted in reliance on other powers (though this may be the subject of provisions in
the Intergovernmental Agreement that will underpin the scheme) and that
instruments made or issued under the Commonwealth PPS Act may affect the
operation of that legislation otherwise than by express amendment.Clause 6 (8) specifies the period during which a reference has effect. Each reference
will begin when the subsection that makes the reference commences and end when
the period of that particular reference is terminated under the proposed Act.Clause 7 deals with the termination of the period of the references specified under
clause 6 (namely, the period ending on a day fixed by the Governor by proclamation).The clause enables the periods of all references to be terminated at the same time or
only the periods of any or all of the amendment references.Clause 8 makes it clear that the separate termination of the period of an amendment
reference does not affect laws already in place. Accordingly, the amendment
reference continues to have effect to support those laws unless the period of the initial
reference is also terminated.Clause 9 provides for the accuracy of a copy of the tabled text containing the
proposed Commonwealth PPS Act to be certified by the Clerk of the Legislative
Assembly of New South Wales. Such a certificate is evidence of the accuracy of the
tabled text and that the text was in fact tabled as contemplated by the Bill.
Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.