The Personal Property Securities Act 2009 (Cth) (PPSA) created a new comprehensive national regime for personal property securities in Australia. The definition of security interest under the PPSA covers “traditional” security interests such as fixed and floating charges over the assets of companies (now known as general security interests) to interests which were not considered security interests in the pre-PPSA era. An example here would be retention of title arrangements.
Under the PPSA, transitional security interests (TSIs) are those created under a security agreement which was entered into before 30 January 2012. TSIs enjoy a two-year honeymoon period where they are “temporarily perfected”, which means that a TSI maintains its pre-PPSA priority as against post-PPSA perfected security interests. 30 January 2014 marks the end of this honeymoon period, and secured parties who have TSIs should consider registering them on the Personal Property Securities Register (PPSR) before 30 January 2014 so as to preserve the priority of the TSI. A number of fees apply to using the PPSR, but registration of a TSI on does not attract any fee. The Registrar gave examples of transactions which may have created TSIs. They include leasing and hiring arrangements, retention of title supplies, and certain commercial consignment arrangements.
If you are a secured party with a TSI or your client falls under this description, now is the time to review the security interest in question and to take any necessary action to protect and preserve its priority.