However, only temporarily…
As you will be aware, from 30 January 2012, the Personal Property Securities Act 2009 (Cth) (PPSA) established a new system for the creation, priority and enforcement of security interests in personal property, which is generally all property other than land, fixtures and certain statutory interests.
The centrepiece of the PPSA is the national Personal Property Securities Register (PPSR) where security interests in personal property may be registered.
Security interests registered on certain Commonwealth, State and Territory registers (including the ASIC Register of Company Charges, the Vehicle Securities Registers and Registers of Encumbered Vehicles) were migrated to the PPSR prior to 30 January 2012. Some of the registrations migrated to the PPSR from pre-existing registers may be, for the purpose of the PPSA, defective because when they were originally created they did not contain the information required by the PPSA.
The Personal Property Securities (Migrated Security Interest and Effective Registration) Determination 2011 (Determination) ensures that migrated registrations remain effective temporarily, despite these defects, if the following criteria apply:
a) the personal property is subject to a transitional security interest;
b) the transitional security interest was registered on a transitional register;
c) the registration of the transitional security interest in relation to the property was effective immediately before the data was given to the Registrar;
d) registration of the transitional security interest was authorised by the law under which the register was maintained;
e) at or after the migration time, but before the registration commencement time:
i. data relating to the personal property has been given to the Registrar, in the approved form; and
ii. the Registrar has accepted the data;
f) the transitional security interest was registered under subsection 333 (2) of the PPS Act;
g) the defect is that the financing statement registered by the Registrar included, or omitted to include, data, whether or not the data was recorded in the transitional register.
If the above criteria are met, this temporary period of ‘effectiveness’ applies until the end time of the original registration or 31 January 2017 (if the original registration does not state an end time). The intention is to give secured parties reasonable time to amend migrated registrations so they meet the PPSA’s legislative requirements.
If the registration is not amended to correct the defect prior to the relevant timeframe, it will become ineffective because of the defect immediately after the end of the relevant period. It is therefore critical that any party with a security interest that was migrated to the PPSR ensures they verify, and if required amend, details of the migrated registration prior to 31 January 2017 (or earlier depending on the end time of the original registration).
Details on how to amend a registration are available on the PPSR website www.ppsr.gov.au. While not exhaustive, the link below also outlines possible issues with migrated registrations, and what this means for amending or renewing these registrations:
While the Determination ensures the temporary effectiveness of migrated registrations, the absence of required data may have consequences under other provisions of the PPSA, e.g. provisions relating to taking personal property free of the security interests.