Insights – PPSR – Do you really know who owns that asset?

13th August 2023

Posted in: Insights

Although we have been operating under the Personal Property Securities Act 2009 (Cth) (PPSA) for over 10 years now (it first became law 30 January 2012), this area of law continues to generate disputes because of the complexity of the legislation and the ramifications of being an unsecured creditor of an insolvent entity.

In the current economic climate, it is more relevant than ever to review your asset holdings and ensure that you are covered by having your interest “perfected” on the PPSR for any goods or assets that are not currently in your possession.

What Is the PPSR?

If you are involved in buying, selling, leasing or hiring assets / goods, this is relevant for you and you may be at risk if you have not registered your ownership interest.

The PPSR is a national online register that shows you whether someone is claiming an interest against goods or assets.

You can also make a registration, so others know when you have retained an interest in goods you are supplying.  This can be useful if your customer doesn’t pay or goes broke, meaning you are in the best position to get your goods, or their value, back.

How does it work?

The register can offer your business risk protection, from losing the stake in your assets and can assist in raising finance, by using unencumbered assets as security for financiers.

Buying or Acquiring Personal Property – searching the register allows you to make an informed decision, because you can tell if the goods you are looking to buy are free from existing finance and safe from repossession.

Selling or Hiring / Leasing Goods – by properly registering your interest in goods you have in ongoing security interest in, ensures that you can obtain those goods back or be first in line to get your money back as a secured creditor.

A “Retention of Title Clause” on your contract, may not be sufficient to protect you in the event that your customer does not pay, and you may find yourself at the back of the queue of creditors.

What Personal Property is on the Register?

A security interest can be granted over almost anything of value, except for land, building and fixtures.

Assets that can be registered include:

  • Motor vehicles, aircraft and boats
  • Livestock such as cattle or horses as well as crops
  • Stock in Trade, artwork and equipment
  • Intangible property including licences patents, copyrights.
  • Shares, cash, cheques and other financial instruments

Can it happen to you?

To give you an idea of why the PPSR is relevant below are some case law decisions in relation to this area:


Keon Pty Ltd as trustee for Keon Family Trust v Goldfields Equipment Pty Ltd (In Liquidation) [2020]

  • Keon loaned $300K to Goldfields, secured by a deed detailing a floating mortgage charge over all business assets, but no other documents were executed
  • Liquidator was appointed to Goldfields, and Keon lodged claim as secured creditor under the deed and associated charge
  • Court held no claim for Keon as security documentation was insufficiently worded to create a floating charge, so Keon simply joined the long list of unsecured creditors


StockCo Agricapital Pty Ltd v Dairy Livestock Services Pty Ltd [2020]

  • Dairy Livestock Traders (DLS) received a sum of money for selling several hundred cattle to Reid Agricultural (Reid) as stock and station agent
  • Reid had a credit account with DLS, and provided a Purchase Money Security Interest (PMSI) to DLS over the stock to be purchased as a surety of payment and this was perfected on the PPSR
  • Subsequently, StockCo provided funds to DLS to purchase the stock and they were granted their own PMSI on the PPSR – which was lodged after the Reid/DLS one was already in place
  • When the transaction took place and Reid paid DLS for the cattle, StockCo claimed that it was entitled to the Reid funds, under its terms of finance and priority PMSI
  • DLS contended that as the registration was after the date of its own PMSI with Reid, StockCo did not have a perfected registration and was not entitled to those funds
  • The court held that StockCo held a perfected PMSI over the cattle that it funded, despite the fact that Reid had taken possession of the cattle, prior to the StockCo PMSI being registered
  • It was held that StockCo was entitled to the funds from the sale and the physical “possession” by Reid was secondary to the “possession” granted by DLS to StockCo under it’s PMSI 


There are many instances of businesses suffering losses due to inattention to the PPSA requirements or having ineffectual registrations so it is important to register and to get the details right.


How Can Alto Help?

If you believe that the PPSR may be something that can have an impact on your business, or you want further information relating to the operations under this legislation, please do not hesitate to contact the Alto Team


Author: Steve Payne