Can I rely on the transitional provisions of the Personal Property Securities Act 2009 to enforce an unregistered security interest?
The transitional provisions of the Personal Property Securities Act 2009 (Cth) (PPSA) and their application to retention of title clauses were considered by the Victorian Court of Appeal in Central Cleaning Supplies (Aust) Pty Ltd v Elkerton (in His Capacity as Joint and Several Liquidator of Swan Services Pty Ltd (in Liq))  VSCA 92.
Central Cleaning Supplies (Aust) Pty Ltd ("Central") supplied cleaning equipment to Swan Services Pty Ltd ("Swan") from around 2009. Each supply of equipment included a retention of title clause ("ROT") in the invoice.
Swan went into liquidation owing Central a sum of money for unpaid invoices for the period from November 2012 to May 2013.
Central sought to enforce the ROT clause and reclaim its equipment.
As readers will know, the PPSA covers a wide range of security interests, including rights under a ROT clause. The legislation makes it clear that a security interest will only be enforceable against a liquidator if that security interest is perfected. That would normally require the security interest holder to register its interest on the Personal Property Securities Register ("PPSR").
Central did not register its security interest on the PPSR. Instead it sought to rely on the transitional provisions of the PPSA, which were designed to protect security interests which had been created, or provided for, before 30 January 2012.
The issue in the appeal was whether Central