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.
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