On 30 January 2012, the Personal Property Securities
Act (2009) (PPS Regime) commenced in
Australia.
The PPS Regime will affect companies in the gambling sector
conducting business in Australia:
if you and/or your suppliers include retention of title clauses
in sale agreements;
if you sell on consignment or if your suppliers sell to you on
consignment; and
if your company enters into hire purchase agreements, equipment
leases and similar agreements.
Preparing for PPS need not be complex or time consuming.
Simple preparation is all that is necessary.
How will the PPS Regime impact your business?
A national online register has been introduced. You can register
your interests on the register (as may your suppliers).
Registration is not limited to traditional interests, such as fixed
and floating charges, but also includes retention of title
arrangements and equipment leases which have not previously been
registrable.
This may be relevant to gaming machine suppliers who include
retention of title clauses in sales arrangements with venues.
To obtain the best protection possible, you must register your
interests in the prescribed way.
Your suppliers and banks may also register against you. Our
searches have revealed many errors in registrations. Any errors
will be publicly visible and should be corrected.
What should you do?
Review your documents: Do they comply or are new agreements
required? This may be important for your terms and conditions of
supply or purchase orders.
Register or lose title: Registration will often be more
important than title! When similar legislation was introduced in
New Zealand, some owners bought their own goods back from
liquidators after failing to register their interests. This is
particularly important in the case of customers who may face
financial difficulties so that you preserve
your rights in the products that you supply.
Review methods of physical supply and stock identification:
Banks already have their documents ready. Failing to prepare means
you run the risk of losing priority to banks or a liquidator.
Audit the listings against companies in your group to challenge
or correct any incorrect registrations.
How can we help you?
Addisons has been working with clients to understand the PPS. We
can help you to:
understand exactly what impact the new regime will have on your
business;
review your agreements to determine whether or not it is
necessary to draft new terms of trade;
draft any new documents;
train and educate your employees, including to conduct searches
and to register your interests; and
audit the PPS register for the accuracy of interest recorded
against your business.
Despite what you might have heard or read elsewhere, dealing
with PPS need not be complex or time consuming. Simple
preparation is all that is necessary.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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