While testators generally have freedom to decide how to dispose of their assets in England and Wales, there are limits to this freedom, including where a beneficiary of the estate is made bankrupt. If the testator passes away during the course of the beneficiary’s bankruptcy, the legacy will usually pass to the trustee in bankruptcy for the benefit of creditors instead of to the beneficiary.

This hot-topic comes as a timely reminder as we approach January 2019 – a milestone date for the Personal Property Securities (PPS) Act, as it has now been seven years since the PPS Register went “live”.

Every business that made seven year registrations will now see them start to expire from 30 January 2019 onwards. Businesses that selected seven year registrations early on when the PPS Register was introduced must take note as their registrations approach expiry. There can be grave consequences for lapsed registrations.

During the administration of a company, liquidators may identify creditors who have received payments in preference to other creditors, and apply to the court pursuant to section 588FF of the Corporations Act 2001 (Act) to recover those payments in order to achieve a more equitable distribution amongst all creditors.

What constitutes a preferential payment?

This is the second of a series of articles that will examine the impact of the Personal Property Securities Act 2009 on specific business sectors. In this article Corporate Lawyer, Llon Riley deals with the impact of the PPSA on leasing or hiring equipment.

Attorney-General Robert McClelland, has today introduced a bill in Federal Parliament to create a comprehensive national personal property securities law, to be known as the Personal Property Securities Act (PPSA). The bill is the culmination of more than three years of public consultation and is a significantly revised version of an exposure draft bill that was the subject of a report by the Senate Standing Committee on Legal and Constitutional Affairs in March of this year.  

When negotiating a commercial lease, it is in the landlord’s best interest to require that securities be provided by the prospective tenant in order to protect the landlord against the tenant’s failure to perform its obligations under the lease. A frequent cause of a tenant’s inability to perform its obligations is its insolvency or financial difficulties.

As a result of their “open” nature, the various Personal Property Registry systems in Canada are occasionally the subject of abuse. For example, in the midst of a litigation proceeding, it may be inappropriately suggested that to prevent an adversary from transferring or dealing with their assets, a financing statement should be registered in order to annoy the other party or to scare off any potential transferees.

On 19 May 2017, the PersonalProperty Securities Amendment (PPS Leases) Act 2017 (Cth) (Amendment Act) received Royal Assent and is now effective. The Amendment Act has changed the definition of a "PPS Lease" (PPS Lease) under the Personal Property Securities Act 2009 (Cth) (PPSA).

The Personal Property Securities Act 2009 (Cth) (PPSA) applies to security interests in personal property including, but not limited to:

The New South Wales Supreme Court has found that a secured party cannot rely on its own mistake when registering on the Personal Property Securities Register (PPSR) to claim that the defective registration “temporarily perfects” its security interest.

The facts