PPSR Masterclass

Transitional or Migrated Securities: Use it or lose it!Starting at 12pm AEST

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PPSR MasterclassTransitional or Migrated Securities: Use it or lose it!12.00 - 12.45pm with Rhonda Arnott

Your Host

Your hosts: Encompass | SAI Global

Polls: During the webinar I will be asking you to take some polls so we can understand your interests.

Questions: Please type your questions in the chat box and we will try to address as many of them as we can during this webinar.

Tamarind Leigh BegleySAI Global

Your Presenter

In more than 15 years of legal practice, Rhonda has advised and represented a large range of national and international clients, in capital raisings, corporate restructures, mergers and acquisitions.

Rhonda also advises boards and internal committees in relation to corporate governance, conflicts of interest, related party transactions, continuous disclosure and compliance with the PPSR, Corporations Act and ASX Listing Rules.

Migrated Securities Transitional Securities

Find & Claim Priority Rules Recent Cases Conclusions

PPSA

• Commenced 30 January 2012 - (RCT)

• 2 year Transitional Period

• Expires 30 January 2014

Personal Property Securities Act 2009 (Cth)

• Migrated 23 Commonwealth, State and Territory Registers

• 4.7 million registrations in total migrated

• 95% ASIC• Problems with

Migration

Migrated Securities

• Migrated securities• Transitional Security

Interests also include:• Previously not considered

security • Previously no register• Example:

– ROT– PPS Leases– Consignment

Transitional Security Interests (TSI)

• Temporary Perfection:• Section 322 PPSA:• Deemed to have

perfection:• From immediately

prior to RCT (30 Jan 2012)

• Until either:– Perfection under

PPSA; or– 24 months after

RCT (i.e. 30 Jan 2014)

Perfection of TSI

PPS Register - migrated given SPG Number

Preliminary Steps:– Create an account

with PPSR– Given access to

Find & Claim– Create New SPG:

SPG Number and Access Code

Migrated Securities - Find & Claim

1.Find: Selecting Migrating Register

Process Find & Claim

2. Select mode, status (unclaimed SPG), Enter Name/ABN/ACNTips: Wildcard search, e.g. *Business*

Process Find & Claim (Continued)

CLAIM:

• Select Securities• Claim: Enter Target (new) SPG

Number and Access Code and Email

• Receive: Verification Statement, Token

Tip: Mistakenly Claim cannot unclaim (Notify National Service Centre, Snr Business Office)

Process Find & Claim (Continued)

Migrated Securities are TSI – remain

perfected – ss330 and 331

Necessity of Find & Claim – correct

details – security not defeated

Post Transition - 31 Jan 2014

Transitional Securities NOT

MigratedLose deeming

perfection Unperfected/unsecured

Priority Rules: Transitional Securities Interests 30 Jan 2014

Explanation of priorities involving transitional security interests

Item

The following security interest

Has priority over

Because.

1. a perfected TSI an unperfected security interest (including a TSI)

Section 55(3).

2. a perfected TSI a perfected security interest that is not a TSI

Sections 55(5), 322 and 322A

3 an unperfected TSI unperfected security interest that’s NOT TSI

Section 55(2) and 321

4 an unperfected TSI unperfected TSI

Section 55(3)

S 320 PPSA

New Rules Priority: Post Transitional Period: 31 Jan 2014

Explanation of priorities involving security interests

Item

The following security interest

Has priority over:

Because:

1. Perfected Security Interest

Security Interest Perfected later in time

Sections 55(4) & (5)

2. Perfected Security Interest

Unperfected Security Interest (including TSI)

Section 55(3)

3. Unperfected Security Interest

Unperfected Security Interest that attached later in time

Section 55(2)

Case: Re: Maiden Civil

In the matter of Maiden Civil (P&E) Pty Ltd, Richard Albarran & Claire Alexander Pleash as Receivers & Mangers of Maiden Civil (P&E) Pty Ltd & Ors v Queensland Excavation Services Pty Ltd & Ors [2013] New South Wales Supreme Court 852

Facts:• Westpac/Esanda financed QES

purchase Caterpillar machinery• Machinery leased Maiden in

May-August 2010 (Pre PPSA)• QES did not register interest

after 30/1/2012

Case: Re: Maiden Civil - Continued

Facts:

• May 2012 Maiden entered GSA Fast Financial Solution (ALLPAP) Registered

• July 2012 Receivers/administration/liquidation

On the face:

Transitional PPS Lease (temporary perfection) v perfected Security interest (ALLPAP)

Case: Re: Maiden Civil - Continued

Is it deemed perfection?

• Lease was registerable at time created (NT Register of Motor Vehicles)

• Section 322(3) PPSA & Reg 9.2 (2010 Regs) - Specific Exemption - Not TSI & no deemed perfection

Fast Won:

Perfected Security Interest (GSA) v Unperfected TSI

• If could have been registered at RCT and not - not benefit from temporary perfection

• Unregistered interest Lessor lose to Lessee – nemo dat

• Financiers register own interest insist Borrower required to register where parts with possession

• Danger relying transitional provisions soon be unavailable

Take Outs

Find & Claim: Migrated securities

Conclusion

Perfect/Register all other Transitional

Securities

Rhonda ArnottB2B Lawyers

Rhonda.Arnott@B2Blaw.com.au

Ph: +61 3 8602 4000

Contact Details

Thank You