A PPSA Rant

This is probably a post that might be better saved for some sort of anniversary but I feel the need to vent a little and remind those who still read these ramblings of this blog’s title. (update: at the time of writing this blog was called "The Poorly Planned Securities Register")

The PPSR has been in place for 18 months now, the ability to lodge transitional security interest registrations will expire in 6 months’ time and we have 18 months to wait until a legislated review of the operations of the PPSA is due to be reported to the responsible Minister (s343).

I suppose my main concern is that the eventual review will spend an inordinate amount of time re-hashing the Register’s first few weeks or so of operation when it was beset by technical problems before making a brief observation that there was ‘some debate’ concerning the application of the Act’s transitional rules but, as the transitional period would, by then, have been long concluded, decline to make any proposals for improvement.

While any dithering by secured parties over whether to register an interest as transitional or non-transitional will certainly come to an end by the close of January 2014, there will still be millions of transitional registrations on the PPSR ripe for challenge by insolvency practitioners anxious to maximise the assets under their administration.

The Transitional vs Non-Transitional issue looks to be with us for a considerable time and, while it would be easy to blame insolvency practitioners and lawyers keen to stretch the meaning of every word and phrase in the Act, the responsibility for this rests squarely with the drafters of the Act.

It also rests with those who failed to make their intentions clear and with those who didn’t seem to realise that the implications of this Act were so substantial that the whole of the country should be informed of its existence. 

It rests with whoever set up the PPSR’s Help Desk, which, when faced with any question that doesn’t involve a ‘press this button’ or ‘click that link’ answer, declines to help and instead suggests that the caller obtains legal advice or contacts a PPSR broker.  An issue of which I’m only too well aware as anyone googling ‘PPSR Broker’ invariably appears to end up laying the question at my doorstep.

We don’t need to get legal advice when we renew our vehicle rego; pretty much any other situation where a regular repeated registration ‘type’ activity takes place does not necessitate immediate reference to a lawyer.  And yet the, supposedly, simple determination as to whether I am eligible to register an interest as transitional or not has become a legalminefield.

We have situations where suppliers with ‘allmonies’ clauses on their retentions of title feel obliged to lodge two separate registrations against the same grantor, just to be on the safe side, as the PPSA does not make it sufficiently clear whether a single PMSI designated registration would be sufficient.

If I take one of my guitars to a well-known guitar shop to sell on my behalf only to find that my ownership counts for nothing in the event the guitar shop goes bust then I think it is quite legitimate to feel aggrieved at a government that changed the laws dealing with such ownership considerations without letting me know and advising me on the available remedies – yet this was exactly what happened to those dealing with JacksonsRare Guitars at the end of last year.

If the strata plan, charity or sports association I am selling to has an ABN, why can’t I use that ABN when I lodge my security interest against them?

Why are the PPSA’s rules on Trusts so convoluted that the best advice we can give is to adopt a belt and braces approach and lodge separate registrations against the trust and its trustee?

Why does it cost nothing to register an indefinite transitional registration but $140.00 to amend it in any significant way?

Why does the PPSR require us to differentiate between an ACN, and ARSN and an ARBN?  They each have 9 digits and are searchable on ASIC so why add a further layer of complication and scope for dispute to an already fraught area?

Why does the PPSA’s definition of a Motor Vehicle include equipment and machinery that quite obviously is not a motor vehicle?  I may do a separate post on this issue but anyone who deals in agricultural equipment that may be towed by a tractor for any distance should look seriously into the issue.

OK, rant over for now (although I reserve the right to post a Part Two at some point).