Damian Walsh, Special Counsel in Banking and Finance at Gadens, discusses the expected seven-year expiry of specific interests on the Personal Property Securities Register.
On 30 January 2012 the “Personal Property Securities Register” (PPSR) commenced operations. The PPSR is an electronic register of security interests which was established under section 147 of the Personal Property Securities Act 2009 (Cth) (PPSA). This commencement date of 30 January 2012 means that on 30 January 2019 the PPSR turned seven years old. The relevance of this anniversary in respect of the PPSR is that if a security interest which was registered on the PPSR relates to:
“consumer property, or property described by a serial number”
the period of registration on the PPSR is limited to a maximum of seven years. So, for example, registrations in relation to motor vehicles are limited to a maximum of seven years. In addition, some types of collateral other than consumer property, or property described by a serial number can be registered either indefinitely or for a period of up to 25 years – which could, of course, also be for a period of just seven years.
This means that registrations of consumer property or property described by a serial number which were made in 2012 for the maximum of seven years, or other types of collateral that were also registered for seven years in 2012, would be due to expire this year. If any such registrations were made on the 30th or 31st of January 2012, or during February, March or early April 2012, then they may have already expired.
Registrations on the PPSR can be extended, but the extension has to be made before the relevant expiry date.
If you missed the extension date and your registration has expired then there is no block on re-registering the security interest. The immediate issue however is that if you perfected your security interest by registration on the PPSR, rather than by possession or control, the expiry of registration would lead to a loss of perfection. In turn this could mean the loss of priority, for example to a secured party who registered after you but is still on the register when you re-register. In some circumstances this may be a concern, in other cases it may not be.
The expiry of a registration, or a re-registration, may also potentially be an issue in relation to insolvency proceedings.
It is worth noting that the expiry of registration on the PPSR would not lead to the underlying security document becoming invalid, just, potentially, the loss of priority of your security interest over other persons with security interests.
Unfortunately the PPSR does not issue notices that a PPSR registration is about to expire, however, the PPSR can be searched for the expiry dates of registrations: Click here.
We would suggest reviewing your registrations and where a registration has not as yet expired, is due to expire and is required to stay on foot, extend the registration. If the registration has expired, we would suggest assessing whether the security interest should be re-registered and if so, re-registering the security interest as soon as possible.
Disclaimer: This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content. Please do not hesitate to contact the author if you have any queries or require assistance with your PPSR registrations.
Damian Walsh is a Special Counsel in the Banking & Finance Team at Gadens. He is a senior lawyer with extensive experience both in private practice and in-house. During his career Damian has worked in Australia, Japan and the UK on a range of high-value transactions. Damian has experience in corporate finance, property finance, bilateral lending, syndicated loans (including LMA and APLMA documentation based lending), project finance, structured finance and agrifinance. Over the course of his career, he has worked on a number of large restructurings, particularly in relation to managed investment schemes. He has also provided regulatory, risk, compliance and retail banking advice to a range of both lender and borrower clients. Contact Damian at firstname.lastname@example.org or connect via LinkedIn .