Time limits most commonly missed in relation to personal properties securities, a claim example and lessons learned.
What's on this page?
Personal properties securities limitations
| Action | Time limit | Legislation | Extension availability |
|---|---|---|---|
|
Action
Registering security interest granted by a corporation |
Time limit
20 business days from commencement of security agreement |
Legislation
s.588FL Corporations Act 2001 (Cwlth) |
Extension availability
A company or any person interested can apply to the court for an order fixing a later time – s.588FM Corporations Act 2001 (Cwlth). Where registration is outside the 20 business day period but is more than 6 months before the grantor is placed into voluntary administration or liquidation, the security interest will be enforceable in an external administration – s.588FL Corporations Act 2001 (Cwlth) |
|
Action
Registering purchase money security interest in inventory |
Time limit
On or before the grantor obtains possession of the inventory (where the inventory is goods) or the time the purchase money security interest attaches to the inventory (where the inventory is other than goods). |
Legislation
s.62(2) Personal Property Securities Act 2009 (Cwlth) |
Extension availability
No extension available |
|
Action
Registering purchase money security interests in non-inventory |
Time limit
15 days after the grantor has obtained possession (where the personal property is goods) or the day the interest attaches to the property (for personal property other than goods). |
Legislation
s.62(3) Personal Property Securities Act 2009 (Cwlth) |
Extension availability
The court can make an order extending time if it is satisfied that it is just and equitable to do so – s.293 Personal Property Securities Act 2009 (Cwlth) |
Claim example
A firm prepared a security deed on behalf of a manufacturer client for the purpose of registering a security interest on the Personal Property Securities Register for good supplied to a retailer.
The firm sent the executed deed and request for registration of a financing statement to a PPS registration agent. The agent found that the parties names were misstated on the front page in that the grantor and grantee descriptions were transposed. The deed was returned to the firm. At some point the front page was corrected but the deed was not returned to the registration agent for several months and not until the retailer was placed into administration. The time limit of 20 days was clearly missed!
There was no clear explanation for why the deed was not amended and returned promptly to the registration agent. This is a common scenario where the final step in the matter is overlooked because of an unexpected requirement to amend documents. The practitioner handling the matter has often mentally moved on and does not follow through with what seems to be an administrative last step.
Lessons
- Beware the short time frames for registering interests on the Personal Property Securities Register.
- Act promptly when documents require amendment in order for them to be registered or to secure registration.
