PPSA and transitional provisions: when the rot starts

Abstract

As is well-known, the Personal Properties Security Act 2009 (Cth) (PPSA) provides a 24-month grace period for 'temporary perfection' of 'transitional security interests', ie, those that derived from a security agreement which pre-dated the Registration Commencement Time (RCT) on 30 January 2012. Retention of Title (ROT) terms of supply did not have to be registered anywhere prior to the PPSA’s coming into operation. The transitional provisions in Pt 9.4 of the PPSA protect, at least for the 'grace period’, the pre-PPSA status of these and other pre-existing arrangements. Title-based security interests such as retention of title, which are now included within the 'substance' test of a 'security interest' in s 12 of the PPSA, and specifically listed in s 12(2) as an example of such a security interest, will be transitional security interests in respect of goods supplied on ROT terms, if they derived from a security agreement that pre-dates 30 January 2012.