PPSA update: Transitional security interests may be no protection

The NSW Supreme Court has held that although the ownership interest of a lessor in certain motor vehicles leased to a company were 'transitional security interests', they were not temporarily 'perfected' and did not take priority over a subsequently-registered financier's general security interest. The decision also supports the proposition that when, under section 267 of the Personal Property Securities Act, an unperfected ownership security interest in goods vests in a company upon its entry into voluntary administration, the company holds those goods subject to any perfected security interest it has granted over those goods, such as under a lender's general security agreement. Partners John Warde and Karla Fraser, and Law Graduate Riley Downie report.