Since the commencement of the Personal Property Securities regime in January 2012, the focus has been on what security interests should be registered, when registration should occur and enforcing security interests.

Now that the dust has settled and people are more familiar with the regime, some focus should be placed on those security interests registered against you or your entities. In particular, are those registrations current and valid?

One key benefit of being proactive with registrations against you or your entities is that it will make due diligence on the sale of business or on obtaining finance a much smoother process.

ISSUES TO CONSIDER TO DETERMINE IF SECURITY INTERESTS ARE CURRENT AND VALID

In reviewing searches of you or your entities, you should consider the following:

  1. If a security interest is a “migrated” security interest (e.g. from ASIC’s Register of Charges) is it still current? Do you still do business with the bank or entity that is the secured party?
  2. Do you still have a relationship with the secured party/supplier? Is it someone that you ceased buying goods from some time ago? Have all amounts been paid to that supplier? Has the arrangement ended so that it is unlikely the security is required?
  3. Is the secured party still in existence? If a company, is the secured party deregistered?
  4. Does the secured party that registered the security interest have a security interest in the personal property?
  5. Do you still own the personal property that secures the security interest?

If any one or more security interests are not current or valid, you can take steps to request that the registration be amended or removed.

The Personal Property Securities Act 2009 (Cth) contains provisions to deal with these circumstances.

HOW CAN YOU DEAL WITH NON-CURRENT OR INVALID SECURITY INTERESTS?

The Personal Property Securities Act 2009 (Cth) (PPSA) establishes a mechanism to deal with security interests that have been registered but which are no longer current or are not valid (or weren’t valid when they were registered).

WHAT CAN WE DO TO HELP

Undertaking an audit of your entities for security interests may be overwhelming from knowing how to do the search, what information or entities to search and to work through any number of registrations (for which there may be very little information).

We can assist you in undertaking an audit through our offering of a range of services for personal property securities matters including:

  1. providing training to you and your staff on how the Personal Property Securities Register works and interpreting searches, verification statements and the registration process;
  2. undertaking the audit on your behalf and, if required, liaising with the secured parties who have registered security interests to ascertain whether or not they are valid security interests;
  3. issuing an amendment demand or approach the registrar for amendment or discharge using specific provisions of the PPSA;
  4. assist you in determining whether a particular registration contains a seriously misleading defect through adoption of common law precedents.