Chapter 8 Personal Property Securities Key Issues 8.1 The Personal Property Securities Act 2009 (Cth) ('PPSA') has made significant inroads into traditional expectations and norms associated with property ownership and rights. The PPSA was introduced in Australia in January 2012 with a transitional period of two years, ending on 31 January 2014. The Act has impacted on most businesses dealing with personal property transactions, such as finance and leasing. The Australian PPSA has been modelled on the Canadian and New Zealand personal property securities legislation, and in that sense the case law from these jurisdictions provided a significant source of precedent in this area of the law. The PPSA has made inroads into common law concepts such as retention of title (also known as 'Romalpa') clauses, and commercial consignments, making it possible for a party who holds a security interest in an asset (for example, to secure moneys loaned) to have priority over the rights of the owner of the property. Previously, retention of title clauses provided effective protection for ownership rights in sales transactions. Since the commencement of the PPSA, this is no longer the case. Similarly, in consignment situations, there was previously no need to register security over one's assets, whereas this has changed under the PPSA. Such a situation could arise, for example, where a series of artworks has been sold to an art gallery on a retention of title basis or provided on a commercial consignment, and the seller/consignor has omitted to register a security interest in favour of him or herself on the national Personal Property Securities Register ('PPSR'). In such a case, a party who holds a registered security interest over the assets of the gallery (the equivalent of the traditional 'floating charge') can defeat a claim by the unregistered owner (the seller) of the artworks, in the event of a priority dispute or the insolvency of the gallery. A lack of knowledge in this area can be devastating for an uninformed artist selling artworks on a retention of title basis or displaying their art on consignment in an art gallery. However, it is not only these types of transactions that can have this potential outcome. The PPSA has a broad application. Under s 12(1) of the PPSA, a transaction that 'in substance secures payment or -169 -
LexisNexis Questions and Answers. Property Law performance of an obligation' in respect of personal property (in ichlectual property (IP) rights such as copyright, Parents, trader And designs), may give rise to a 'security interest , a novel conce australian law. This could include transactions whereby bailment made for value, copyright licences are used as security, where 'chicles are sold on consignment, and where IP rights are assigned. o a transaction gives rise to an interest that meets the PPSA definition a 'security interest' under s 12, the transaction is regulated by the PPSA and 'perfection' (which usually involves timely registration on the Ppes .required to preserve a party's priority interest in the property as aga third