This was a webinar presentation presented on 22 November 2016.
The slides for this presentation are as follows:
Overview of Enforcement provisions in Chapter 4 of PPSA
- What is excluded?
- Application of rights to seize and sell goods
- Entering locked premises
- The Secured Party’s obligations to the Grantor during and after enforcement
Security Interests excluded from application of Chapter 4 of PPSA
S 109 Security interests excluded
- Security interests that are deemed security interests for the purpose of the PPSA and do not secure the payment or performance of an obligation for example:
- PPS leases
- Commercial Consignments
- Goods outside Australia
- Security Interests in Investment Instruments perfected by control and possesion
- Security Interests in Intermediated Securities
- Only s110, s111, s113 and s140 apply
- Consumer property / household goods – Grantor use goods predominantly for personal, domestic or household purposes. The following sections of the PPSA finds no application:
- s117 & s118 (relationship with land laws)
- s120 (enforcement of security interest in liquid assets)
- s126 (apparent possession of collateral – stays in possession of Grantor)
- s128 (2)(b) & (c) (disposal of collateral by lease or licence)s128(2) (c) (
- s129 (disposal by Secured Party purchasing collateral)
- s134 (disposal by Secured Party’s retention of collateral)
Seizing collateral – s 123
- Secured party may use any method permitted by law to seize collateral when the debtor is in default under the security agreement – s123
- Intangible property – seizure by notice
- Seizure does not constitute perfection
- Apparent possession – s126
- Rights of higher priority parties to take over possesion, provided debtor is in default pursuant to security agreement with higher priority party –s 127
Rights to sell collateral s 128
- Private or public auction sale (auction /closed tender)
- Lease only if provided for in security agreement
- Intellectual property – license
- Secured Party may purchase collateral – public sale only (does not apply to household / consumer goods)
- Notice requirements (form requirements s 130(2) ) and rights to object s137
Right to Retain collateral s 134
- Secured Party may retain collateral subject to notice requirements
- Title in collateral will pass to Secured Party
- Notice requirements & rights to object
- Does not apply to household / consumer goods
Rules applying after enforcement – Part 4.4
- Distribution of proceeds – priority & expenses
- What if the Grantor pays the debt? Security Agreement may be reinstated if Grantor pays any amounts in arrears and the amount of any expenses
- Waiving notice requirements – s 144
Problems with accessing the collateral
- Trespass laws – QLD – s 11 of Summary Offences Act 2005
- Residential property – Application of National Consumer Protection Act 2009
- Require Court Order authorising entry or
- Express written consent of occupier (beware, consent may be withdrawn at any time)
- Commercial premises
- Court Order authorising entry, or
- Express consent of occupier (may be withdrawn, even if in breach of security agreement)
Obligation to act “honestly” and in “commercially reasonable manner” s 111
- What does acting “honestly” mean in context of PPSA? Terms are not defined and have not been considered in the Courts in the context of PPSA.
- When will you be acting in a commercially reasonably manner ?
- Objective test to be applied.
Need to know about enforcing security interests as a secured party? Contact us
Call our Business Development Team on (07) 3252 0011 for an appointment with one of our Brisbane PPSA/PPSR Lawyers today.
