Last Friday, submissions closed for the Government’s review of the Personal Property Securities Act 2009. While many issues can be raised with the PPSA and its practical operation, Hall & Wilcox’s submissions concentrated on 5 key matters which, in our experience, commonly give rise to uncertainty and dispute:
- the necessity for a registration to record whether the security assets (i.e. collateral) constitute ‘inventory’;
- the characterisation of certain contractual rights as ‘security interests’;
- the characterisation of leases, bailment and consignment arrangements;
- issues concerning amendment demands and defective registrations; and
- the time at which creditors’ competing priorities are to be determined.
In the first round of submissions (June 2014), some 37 submissions were made to the Government regarding issues particular to small business. Key themes which arose concerned the level of awareness of the PPSA, the complexity of the PPSA and the functionality of the online register.
These themes were reiterated in our submissions and will no doubt be raised frequently in the submissions made to the Government last Friday.
The next steps for the Review will include consideration by the Secretariat of the submissions and meetings with stakeholders to discuss the issues raised. While the review may take some time, we are hopeful that amendments to the PPSA will result which reduce uncertainty and improve the practical application of the regime.