A new National Register for what are described as personal property securities has been established. The purpose of the new National Register is that any consumer will be able to check when they are buying used goods such as a car, boat or equipment that someone isn’t making a claim over that property. A common example might be where someone borrows money from a Bank or Finance Company to buy a car and the Bank/Finance Company takes security over the car. If someone else then was considering buying that car they need to find out before they pay for it whether anyone such as a Bank or Finance Company claims to have a pre-existing interest or claim over the car.
If you pay the “owner” for say, a car, and the owner doesn’t pay out the Bank, then the Bank can repossess the car from you if the Bank registered its claim.
The Register is managed by the Insolvency and Trustee Service Australia (ITSA) which is an Australian Government Agency. A search of the Register can be conducted online on the website: www.ppsr.gov.au.
The creation of this new Register has implications also for businesses who wish to protect goods and equipment that they supply to their customers where the customers have not yet fully paid for the goods and services supplied. Traditionally the supplier would include in their invoice a clause saying that ownership of the materials and equipment supplied to the customer remain with the supplier unless and until the customer pays the supplier in full. With the setting up of the new Register, it would be necessary for the supplier to now register their dealings with their customer on the Registry because otherwise a subsequent purchaser may argue that they searched the Register and having found that there was no recorded claim, that they were then entitled to purchase the goods that had originally been supplied by the supplier free of any claim.
It would be unworkable for businesses if they had to register every dealing they had with every customer in which they supplied goods to them. It is possible however, to register once as an ongoing general class of dealings, your dealings with a particular customer. Then any time in the future you supply goods to that customer your claim to retaining ownership of the goods until you have been paid remains valid and you do not have to re-register your claim each time you deal with that customer.
It is recommended therefore that any businesses who, as part of their dealings with their trade customers, in particular, supply materials or goods that they consider Registering their dealings on the Personal Property Securities Register. The business should continue to include the clause on their invoices which states that the supplier continues to own the goods until the customer has paid the invoice in full.