“Ask the Expert” is a new column we are bringing our readers from this edition of the Australian Banking and Finance Law Bulletin. For the column, I will ask a legal expert a topical question on banking and finance law and practice, and the expert provide comments and insights on the topic at hand. Read my General Editor's note to find out more. We also have articles on Continuous Linked Settlement, PPSR registrations, and the most up-to-date case law. This is a must read edition!
A new approach to working with commercial information - learn from this year's winner of the LawTech award for best practice knowledge management
"Best Practice in Knowledge Management" is the award category at the annual LawTech Summit that recognises outstanding achievement in the process of collating, organising, sharing and analysing knowledge.
This year, law firm HWL Ebsworth took home the award. HWL Ebsworth was recognised for its innovation in response to the significant legislative change brought about by the new Personal Property Securities (PPS) regime, which has direct implications for many of its clients.
Thank you again to Peter Frankl of Legal Practice Intelligence for his report titled "HWL Ebsworth LawTech award for best practice knowledge management reflects changing attitude to information in law firms", which includes my comments relating commercial information management.
Peter Frankl reported that HWL Ebsworth uses a new cloud based visual information management platform called Encompass, which has enabled the firm to improve the efficiency and accuracy of its commercial search and review, particularly when it comes to PPS related information. It has also enabled the firm to finalise due diligence quickly, provide prompt advice and minimise risk. I wrote about visual information management in two earlier blogs, which you can revisit here and here.
If you need assistance with commercial information management, such as a visual information management solution, just contact us for assistance.
The Personal Property Securities Amendment (Motor Vehicles) Regulation 2014 (Cth) was registered on 1 April 2014. It will commence in 3 months on 1 July 2014. The new Regulation narrows the definition of motor vehicle for the purposes of the Personal Property Securities Act 2009 (Cth) (PPS Act).
The new Regulation has a grand total of only 4 pages, which includes the cover page and the contents page. The operative provisions consist of merely a few lines on the last page, which repeals paragraph 1.7(2)(b) of the current Regulation and substitutes the existing wording with this wording “(b) is capable of a speed of at least 10 km/h; and (ba) has one or more motors that have a total power greater than 200W” (emphasis added).
So what does this mean? The current definition of motor vehicle provides that a motor vehicle is personal property built to be propelled wholly on land, by a motor that forms part of the property, and that either is capable of a speed of at least 10km/h, or has one or more motors that have a total power greater than 200W. The amended definition will provide that personal property must have both of these characteristics to qualify as a motor vehicle.
And what impact will this have? The Explanatory Statement (ES) to the new Regulation explains the impact in one succinct statement – “The narrowing of the definition reduces the number of goods that will be motor vehicles, which in turn will reduce the number of security interests which may require the making of separate registrations against the serial number of the goods involved rather than only a registration against the party granting the security interest.”
The ES also explains that the objective here is to “reduce the costs of complying with the PPS Act for small and medium equipment hire businesses whilst still maintaining the utility of the Register as a record of interests in personal property for third parties”.
Both the Regulation and the ES can be accessed here.
It is fair to say this is probably the first of a series of changes about to take place. The PPS Act is now over 2 years old. Last week, on 4 April 2014, the Commonwealth Attorney-General, Senator the Hon George Brandis QC, said it is timely to review the PPS Act’s effect to ensure it is meeting its objective of providing greater certainty to lenders and helping business, especially small business, to access finance. The Government is undertaking a review into the PPS Act, and an interim report is due on 31 July 2014. The interim report will focus on issues raised in relation to small businesses. The final report is due on 30 January 2015. Time will tell whether and how the review and the recommendations that follow will change Australia’s personal property securities regime.
This post first appeared on CPD Interactive's "Legal Natter's Blog".
The Personal Property Securities Act 2009 (Cth) (PPSA) created a new comprehensive national regime for personal property securities in Australia. The definition of security interest under the PPSA covers “traditional” security interests such as fixed and floating charges over the assets of companies (now known as general security interests) to interests which were not considered security interests in the pre-PPSA era. An example here would be retention of title arrangements.
Under the PPSA, transitional security interests (TSIs) are those created under a security agreement which was entered into before 30 January 2012. TSIs enjoy a two-year honeymoon period where they are “temporarily perfected”, which means that a TSI maintains its pre-PPSA priority as against post-PPSA perfected security interests. 30 January 2014 marks the end of this honeymoon period, and secured parties who have TSIs should consider registering them on the Personal Property Securities Register (PPSR) before 30 January 2014 so as to preserve the priority of the TSI. A number of fees apply to using the PPSR, but registration of a TSI on does not attract any fee. The Registrar gave examples of transactions which may have created TSIs. They include leasing and hiring arrangements, retention of title supplies, and certain commercial consignment arrangements.
If you are a secured party with a TSI or your client falls under this description, now is the time to review the security interest in question and to take any necessary action to protect and preserve its priority.
This post first appeared on CPD Interactive's "Legal Natter's Blog".
Do you know you can access a free copy of the PPS Act online? Today, the Australian Government’s ComLaw released the latest PPS Act as amended, taking into account amendments up to Federal Circuit Court of Australia (Consequential Amendments) Act 2013 (which is an Act devoted largely to the renaming of “Federal Magistrates Court” to “Federal Circuit Court”).
You can access the updated PPS Act here.
You may be thinking "why would I want to read the PPS Act?" Whether you are a lawyer or not, if you want to understand some popular PPS terms (for example, the definition of "security interest"), find a summary of key PPS concepts (for example, what “registration” really entails), or find examples to aid your understanding of the law, a quick search of the Act may just give you the answer you want. Here are some tips to get you started:
The PPS Act is not a simple piece of legislation to master, but some PPS answers are easier to find than others. For in-depth PPS analysis or expert legal advice, definitely consult an expert! (And Legal Know-How can help you.)
Exactly one year ago, on 30 January 2012, Australia’s new Personal Property Securities (PPS) regime commenced. On the same day, the PPS Register began its life as a national, 24/7, online noticeboard for the recording of security interests in personal property.
The far-reaching PPS reform was welcomed by most, especially those who take a longer term view, focusing on cost savings and other business benefits. In 2012, the Productivity Commission assessed the reform as follows:
It remains to be seen as to whether the Productivity Commission’s assessment is accurate.
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