PPSA issues in the heavy machinery industry
Our last article looked at contractual disputes in the heavy machinery industry. This week we will look at the Personal Property Securities Act 2009 (Cth) (PPSA) and common issues that may arise.
The PPSA is a Commonwealth Act that governs security interests in personal property. It established the Personal Property Securities Register (PPSR) which enables secured parties to give notice of actual or prospective security interests by recording information about secured parties, grantors and collateral.
Some common PPSA issues that arise are as follows:
Failure to register your security interest
If you do not register your security interest on the PPSR then you may lose your priority position in the event of insolvency or default by the debtor.Incomplete or incorrect registration details
It is essential that you provide accurate and comprehensive details when registering your interest on the PPSR. If your registration is defective, your interest in the property may not be properly protected.Insufficient searches and due diligence
It is important to conduct searches on the PPSR to identify any existing security interests or competing claims. This will provide insight on the equipment’s encumbrances and a debtor’s financial obligations. Proper due diligence can help mitigate risks and ensure a clear title to the machinery.Priority disputes with other secured parties
If multiple parties have registered security interests on the same machinery, disputes regarding priority can arise. The PPSR determines priority based on the time of registration, with earlier registrations generally having a higher priority. However, there may be instances where conflicting registrations or competing claims create uncertainty in relation to the rights of each secured party involved.
Understanding and addressing PPSR issues is crucial in the heavy machinery industry to protect the interests of secured parties. At Scoglio Law, we are experienced in PPSR issues. If you need legal advice, please do not hesitate to contact Tony Scoglio on (07) 3833 2100.