The Personal Property Securities Register (PPSR) commenced on 30 January 2012, so 30 January 2019 is an important deadline concerning security interests registered on the PPSR.
The PPSR was introduced to nationalise and consolidate the existing Commonwealth, State and Territory registers throughout Australia that dealt with security interests over personal property.
A number of existing registers were automatically migrated into the PPSR, including the ASIC company charge register, and of particular relevance to South Australians, the Vehicles Securities Register, the Bills of Sale Register, the Stock Mortgages and Wool Liens Register, and the Liens on Fruit Register. A complete list of the migrated security registered
can be found here.
The period for many migrated registrations is seven years, with the seventh anniversary of the start date for registrations on the PPSR falling on 30 January 2019. While we expect that many migrated security interests would have been paid out by now, many of those that are still in effect and are not extended will expire on this date.
In addition to migrated registrations, the default period for security interests registered on the PPSR is also seven years (however, this is only the default position and a security interest may have been registered for a shorter or longer
period). As a result, security interests that were registered in 2012 for the default period will expire this year if they are not extended.
Importantly, secured parties will usually not receive any correspondence from the PPSR notifying them that a security interest is about to expire. The PPSR recently sent a general update to secured parties regarding the seven year anniversary of the PPSR, however this does not usually occur.
Now is a good time for all secured parties to review the details of security interests they have registered on the PPSR and ensure that any registrations that are still current are extended before they expire so the protection provided by the PPSR is maintained. Secured parties can request a report from the PPSR detailing
registrations that are due to expire within a specified timeframe (please see this link for details on how to request the report).
Both enforceability and priority are based on continuity of registration, so it is extremely important that all PPSR registrations are reviewed to ensure that there is no unintended break in protection. If this were to occur, the priority rules may result in earlier secured creditors ranking behind later secured creditors in the event that competing security interests are enforced.
In addition to reviewing the registration period, we also suggest that secured parties review and if
necessary update the registration details, as there have been many instances since the introduction of the PPSR where incorrect registration details have invalidated a registration.
For more specific information on any of the material contained in this article please contact Stephen King on +61 8 8217 1308 or sking@normans.com.au or Johanna Churchill on +61 8 8210 1236 or jchurchill@normans.com.au.