By Aidan Drinkwater*
The enactment of the Personal Property Securities Act 2009 (Cth) (PPS Act) has signalled the official arrival of Art 9 of the Uniform Commercial Code (US) in Australia. The legislation will effect a dramatic change to Australia’s law of security interests which is in need of reform. At the heart of the new regime is the reorganisation of priority rules around the fundamental principle that priority be afforded to parties that perfect, mostly through registration, their security interest first. This is subject to an exception for purchase money security interests (PMSIs). PMSIs have received limited recognition at general law, however, the PPS Act sets out extensive provisions which incorporate vendor credit arrangements previously considered to be outside the scope of the law of security interests. Accordingly, the existing body of general law relating to retention of title and similar devices will be supplanted by the statutory PMSI regime. The purpose of this article is to consider the effect of this by comparing the establishment and extinguishment of the PMSI and the rights of vendor creditors under the general law with the position under the PPS Act’s embodiment of Art 9.
The full article can be accessed here: “The rise and fall of purchase money security interests at general law and under Article 9 regimes” (2010) 21 JBFLP 5.
* Aidan Drinkwater, Solicitor, Herbert Geer.