It is now 3 years since the Personal Property Securities Act came into full force on 30 January 2012.
The PPSA reformed the law of taking security over almost all kinds of property except land. For some secured lenders, things ultimately became much simpler: a single register replacing multiple different State-based, grantor-based or property-based registers. For others, it did not. Equipment lessors, suppliers selling on retention of title terms, and others, had to learn to grapple with a new registration system to protect the interests that were previously theirs simply by right of ownership.
And 30 January 2015 also marks the end date for the Year 3 review of the Act carried out by Mr Bruce Whittaker for the Attorney-General and the Parliamentary Secretary to the Prime Minister.
The review process is described here. Initial submissions were called for, and then Mr Whittaker issued 4 detailed consultation papers. Between 15 and 30 responses, available here, were received for each of the 4 consultation papers. Mr Whittaker now has the job of finalising his report, which I expect will be tabled in Parliament in the next few months.
I submitted responses for each of the 4 consultation papers. My 3 highest level issues were:
- Registration simplification. The registration system for security interests needs to be simplified, so it is capable of being used by secured parties in the ordinary course of business without needing detailed professional advice. In particular:
- the ‘collateral class’ system is too complicated, and
- there are too many fields for things like ‘PMSIs’ and ‘control’.
- PPS lease simplification. The requirement to make registrations for leases should be confined to leases, and not extend to other ‘bailments’.
- 20 business day rule for companies. The special rule requiring company security interests to be registered within 20 business days (Corporations Act, s588FL) should be removed. It does not apply in New Zealand or other countries with PPSAs, and I cannot see a good reason to treat companies different from other grantors of security interests.
It will be interesting to see what Mr Whittaker’s report says when it is released, and whether the Government acts on it.