Bills Digest no. 60 2009–10
Personal Property Securities (Consequential Amendments) Bill 2009
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date introduced: 21 October 2009
House: House of Representatives
Portfolio: Attorney-General
Commencement: Various dates contained in the table in clause 2.[1]
Links: The relevant links to the Bill, Explanatory Memorandum
and second reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills have been passed they can
be found at ComLaw, which is at http://www.comlaw.gov.au/.
The purpose
of the Bill is to amend 25 Commonwealth Acts that deal with the creation,
registration, priority, extinguishment or enforcement of interests in personal
property.
The Personal Property Securities Bill 2009 (the principal
Bill) was introduced into the House of Representatives on 24 June 2009. The
background to the principal Bill is set out in the relevant Bills Digest.[2]
In essence it establishes a register of personal property securities in place
of separate registers tracking whether there is any mortgage or loan or other
financial encumbrance over assets. The principal Bill will apply to all
transactions which create an interest in personal property that secures a loan
or other obligation.
According to the
Attorney-General the current Bill:
… represents the next stage in the Government’s harmonisation
of Australia’s personal property laws.
Currently there are over 70 Commonwealth, State and Territory
laws, as well as common law and rules of equity governing security interests in
personal property.
These different laws vary in their application according to
the form of the transaction, the nature of the debtor or the jurisdiction in
which the property is located. This adds significantly to transaction costs.
Personal property securities reform is an important part of
COAG’s deregulation agenda.[3]
The principal Bill was referred to the Senate Legal and Constitutional
Affairs Legislation Committee for inquiry and report. The report was of the Committee
was published on 20 August 2009.[4]
The Committee recommended that the principal Bill be passed subject to a
commitment from the Government to, amongst other things:
include in a consequential amendments bill to be debated in
the Senate cognately with this Bill and intended to take effect immediately
after the commencement of the 2009 Bill all changes to the Bill identified as a
result of concerns raised with this committee and subsequently directly with
the department during the recommended further period of consultation until 30
September 2009.[5]
The Government response to that recommendation is the
current Bill which contains, in Schedule 4, the changes to the principal Bill
which were identified by the Committee.
In addition, the Liberal Senators in the Committee
recommended that the Government develop and implement a comprehensive education
campaign for small to medium business and others prior to the start-up date for
the new personal property securities system.[6]
That recommendation was accepted by the Government which undertook to develop
and implement an education campaign prior to the commencement of the new personal
property securities system.[7]
On 29 October 2009 the Senate
referred this Bill to the Senate Legal and Constitutional Affairs Legislation
Committee for inquiry and report by 16 November 2009.[8] The
closing date for submissions is 9 November 2009.[9]
According to the Explanatory
Memorandum, the Bill will not have a financial impact on the operations of
Government.[10]
The Bill contains five Schedules.
Items 1–18 of Schedule 1 amend the Fisheries
Management Act 1991 (Fisheries Management Act) and the Torres Strait
Fisheries Act 1984 (TS Fisheries Act).
Item 1 inserts the term PPSA security interest[11] into the interpretations contained in existing subsection 4(1) of the Fisheries
Management Act to differentiate between interests arising under the Fisheries
Management Act and security interests to which the Personal Property Securities
Act (when enacted) applies.
Items 5, 10 and 17 recognise that from the
Personal Property Securities Act registration commencement time,
PPSA security interests will be registered on the PPS register.[12]
The Fisheries Management Act provides for the creation of
statutory fishing rights options under existing section 31A. Item 7 of
Schedule 1 of the Bill inserts proposed section 31FA which sets out the
priority between a PPSA security interest and a statutory fishing rights
option. Similarly, item 12 inserts proposed section 46A which
sets out the priority between a PPSA security interest and an interest in a fishing
right.[13] In particular, interests under section 31F or 46 will have priority over
unperfected PPSA security interests in the same property.[14]
Item 16 inserts proposed section 108A which
provides that the seizure, detention or forfeiture of a boat or any other property
under the Fisheries Management Act will have effect despite any action taken in
relation to enforcement of a PPSA security interest in the boat or other
property.
Items 19–20 of Schedule 1 amend the TS Fisheries Act. Item 19 inserts the definition of PPSA security interest into existing subsection 3(1) of the TS Fisheries Act. Item 20 inserts proposed
section 52J to ensure that any the seizure, detention or forfeiture of a
boat or any other property under the TS Fisheries Act will take precedence over
any enforcement action taken in respect of the same personal property under the
Personal Property Securities Act (when enacted).
Schedule 2 contains various amendments to the following
intellectual property statutes:
- Designs Act 2003 (Designs Act)
- Patents Act 1990 (Patents Act)
- Plant Breeder’s Rights Act 1994 (Plant Breeder’s Rights
Act) and
- Trademarks Act 1995 (Trademarks Act).
Items 1, 14, and 18 insert the definition of PPSA
security interest into the Designs Act, Patents Act and Trademarks Act
respectively. Under each of those Acts, a person who is the registered owner
of a design, patent or trademark respectively may register their rights on a
Register that has been created under the relevant Act. The effect of the
amendments in Schedule 2 is to preserve those Registers and to allow the
continuing registration of designs, patents and trademarks. However, if the
interests registered satisfy the definition of PPSA security interest, they
will also have to be registered on the Personal Property Securities
Register in order to preserve priority.[15]
Items 16 and 17 insert reference to the
Personal Property Securities Act into the Plant Breeder’s Rights Act.
Schedule 3 makes consequential amendments to the following
maritime statutes:
- Admiralty Act 1988 (Admiralty Act)
- Marine Navigation Levy Collection Act 1989 (MN Levy
Collection Act)
- Marine Navigation (Regulatory Functions) Levy Collection Act
1991 (MN (Regulatory Functions) Levy Collection Act)
- Navigation Act 1912 (Navigation Act)
- Protections of the Sea (Civil Liability) Act 1981 (PotS
(Civil Liability) Act)
- Protection of the Sea (Harmful Anti-fouling Systems) Act 2006 (PotS
(Harmful Anti-fouling Systems) Act)
- Protection of the Sea (Prevention of Pollution from Ships) Act
1983 (PotS (Prevention of Pollution from Ships) Act)
- Protection of the Sea (Shipping Levy Collection) Act 1981,
and (PotS (Shipping Levy Collection) Act), and
- Shipping Registration Act 1981 (Shipping Registration Act).
In the case of the MN Levy Collection Act,[16] the MN (Regulatory Functions) Levy Collection Act,[17] the PotS (Civil Liability) Act,[18] the PotS (Harmful Anti-fouling Systems) Act,[19] the PotS (Prevention of Pollution from Ships) Act[20] and the PotS (Shipping Levy Collection) Act,[21] the amendments will have the effect that enforcement action under those Acts
will take precedence over any enforcement action in respect of the same goods
under the Personal Property Securities Act (when enacted).
By contrast, item 18 repeals existing sections 38–44A
of the Shipping Registration Act which currently deal with the priority of
mortgages over ships. Item 25 inserts proposed section 59A which
will require mortgages over ships and caveats to be registered on the Personal
Property Securities Register—and that provisions of the Personal Property
Securities Act (when enacted) will be used to determine priorities of
securities interests in ships.
Schedule 4 of the Bill amends the Personal Property
Securities Act. Importantly, none of the provisions will come into force until
immediately after the Personal Property Securities Act 2009 commences.
In addition items 8 and 36 are dependent upon the enactment of
the National Consumer Credit Protections Act 2009.
According to the Explanatory Memorandum:
Schedule 4 makes minor technical amendments in response to
submissions made to the Senate Legal and Constitutional Affairs Committee’s inquiry
into the provisions of the PPS Bill and subsequently to the Attorney-General’s
Department. The PPS Bill is being amended through the Consequential Bill,
rather than by way of parliamentary amendments, to avoid the need for States
who have given a referral of power to give a further referral of power in
respect of the amendments.[22]
Many of the amendments have already been flagged in the
Bills Digest for the principal Bill.
Schedule 5 makes consequential amendments to the following
Commonwealth statutes:
- Air Services Act 1995
- Bankruptcy Act 1966 (Bankruptcy Act)
- Commonwealth Inscribed Stock Act 1911
- Corporations (Aboriginal and Torres Strait Islander) Act 2006
- Health Insurance Act 1973
- Insurance Act 1973
- Privacy Act 1988 (Privacy Act)
- Quarantine Act 1908, and
- Wool International Act 1993.
Notably, items 5–9 insert definitions into the
Bankruptcy Act so that there will be consistency with the definitions in the
Personal Property Securities Act (when enacted). In particular item 9 substitutes a new definition of secured creditor which includes a
PPSA secured party where the PPSA security interest arose as security for the
debt, and is perfected.
In addition, items 25–30 amend the Privacy Act. Item
29 inserts proposed section 28B which empowers the Privacy
Commissioner to investigate an act or practice that may be an interference with
the privacy of an individual under the Personal Property Securities Act. Item
26 adds a note at the end of existing section 13 to the effect that certain
contraventions of the Personal Property Securities Act (when enacted) will be
an interference with the privacy of an individual.
© Copyright Commonwealth of Australia
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Feedback is
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Paula Pyburne
12 November 2009
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
This work is copyright. Except to the extent of uses permitted by the
Copyright Act 1968, no person may reproduce or transmit any part of this
work by any process without the prior written consent of the Parliamentary
Librarian. This requirement does not apply to members of the Parliament
of Australia acting in the course of their official duties.
This work has been prepared to support the work of the Australian Parliament
using information available at the time of production. The views expressed
do not reflect an official position of the Parliamentary Library, nor
do they constitute professional legal opinion.
Feedback is welcome and may be provided to: web.library@aph.gov.au.
Any concerns or complaints should be directed to the Parliamentary Librarian.
Parliamentary Library staff are available to discuss the contents of publications
with Senators and Members and their staff. To access this service, clients
may contact the author or the Library’s Central Entry Point for
referral.
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