Personal Property Securities
This guide provides the explanation and tools practitioners need to navigate the PPSR system, readily document loans using personal property as security and also advise and assist clients seeking to discharge or vary security interests. The helpful suite of precedents includes various forms of loan agreement creating security interests, from single assets to complex business undertakings, together with our comprehensive Retainer Instructions, advice certificates, company resolutions, discharges and all other documents the practitioner is likely to need when performing this type of work.
The detailed and practical commentary provides a clear and comprehensive explanation of the PPSR regime and assistance with using the register in loan and asset sale transactions.
Recent publication updates can be viewed on Obiter - our News & Updates site.
Some of the most popular precedents in this publication include:
- Certificate of independent financial advice
- Acknowledgement of legal advice by proposed guarantor
- Minutes of meeting of grantor resolving to sign general security agreement
- Equipment hire agreement
- Security agreement - Company extensive all assets
- Security agreement - Concise
- Terms of trade
- Consent to same solicitor giving legal advice - Grantor guarantor
- Consignment agreement
MATTER PLAN
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“ Commentaries ”
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“ In the legal profession the term ‘costs’ refers to the fees and other expenses a solicitor charges a client for their professional services and other payments that arise out of the provision of legal services, including disbursements such as court fees. Costs are one of the most heavily regulated ... ”
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“ Nature of disclosure6 Timing of disclosure7 ”
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“ Costs disclosure is not required in relation to certain clients, described in the legislation as ‘sophisticated clients’ or ‘government or commercial clients’ as defined by the relevant legislation to include clients such as lawyers, law firms, public companies, liquidators and government entities. ... ”
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“ Cost agreements are not always required although clearly as between the practitioner and their client there will be disclosure but without the need for formal compliance with the regulation. The limits are: ”
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“ In NSW & VIC there is a standard costs disclosure for fees under $3,000 which is included in the precedents. If the total legal costs in a matter (excluding GST and disbursements) are not likely to exceed $3,000 (the higher threshold), a law practice may, instead of making a disclosure under ... ”
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“ Knowing that clients are disinclined to read, sign and return cost agreements, the letter sending them usually provides that unless heard to the contrary the practice will assume agreement. There will almost always be a later opportunity to have the agreement signed. Of course, many practitioners ... ”
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“ Costs are remuneration for professional work when acting in the capacity of a barrister or solicitor. Payments to a practitioner for work which is not professional work, are not costs. Disbursements are payments made, or liabilities incurred in the course of practice and which the practitioner is ... ”
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“ Firms are required to provide an estimate of the total of costs, excluding GST and disbursements, and information on the impact of any significant change to these costs. A law practice must take all reasonable steps to satisfy itself that the client has understood and consented to the proposed ... ”
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“ What is a disbursement Disbursements are payments made, or liabilities incurred in the course of practice, and which the practitioner is bound to pay whether put in funds by the client or not; or payments which, by established custom and practice of the profession, the practitioner is bound to pay. ... ”
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“ A lawyer may request money on account of fees be paid into a trust account before the commencement of work. This is particularly so in criminal and other court matters where the inclination to pay may wane with an unwanted outcome. The funds may cover legal fees as well as disbursements and the ... ”
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“ The costs agreement will set out the billing cycle. Commonly a regular monthly billing cycle is adopted covering work undertaken during the previous month. ”
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“ A lump sum invoice is one which sets out a recital describing the legal service provided and a total amount. An itemised invoice is one which sets out in detail each of the legal services provided, the date they were provided, and the cost for each service. An itemised invoice allows for an invoice ... ”
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“ A law practice cannot charge for the time spent in preparing an invoice. A law practice cannot charge for the time spent in preparing an itemised invoice for a client who has already received a lump sum invoice. ”
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“ All bills should be accompanied by a written statement setting out the avenues that are open to the client in the event of a dispute and any time limits that apply to the taking of such action. Under the uniform law in NSW and VIC each bill or covering letter must be signed by a principal of the ... ”
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“ – When to charge and how to charge Goods and Services Tax (GST) is a broad-based tax of 10% applied to most goods and services, including legal services. Businesses are required to register for GST if their turnover exceeds the $75,000 threshold. If turnover is less than $75,000 than registration ... ”
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“ Reducing fees can create good will but needs to be handled with care as some take offence to the implication that they cannot afford to pay for the work they have retained. It is also a hard won reality that comes from experience that people are inclined not to value any advice given for free. ”
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“ Credit terms are quite common and need to be clearly documented and administered. ”
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“ Notification of rights is a requirement in all states and is found in all example invoice precedents. If the client has not been advised of their rights in a costs agreement, then practitioners must advise the client of their rights at the time of issuing the invoice. ”
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“ Monthly accounting for work in progress is recommended in order to achieve target lockup days. If debtors are not followed up promptly cash flow reduces making it imperative to adopt a debtor’s policy for effective debtor control. All overdue accounts must be followed up promptly and repeatedly. ”
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“ Termination20 Lawyer’s lien20 ”
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“ Sound financial management is absolutely critical to the success of the law practice. There is a high correlation between practices with poor financial management and increased probability of experiencing professional negligence claims. The link is clear. Principals, who do not manage their ... ”
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“ Methods of payment include: Credit card; ”
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“ All By Lawyers cost agreements include the following authority to transfer money to pay their invoices: Trust money ”
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“ Lawcover recommends that practitioners use the cost assessment scheme to recover costs. Instituting proceedings against a disgruntled client who refuses to pay an outstanding bill exposes practitioners to the risk of a cross-claim in negligence being filed. The advantage of the cost assessment ... ”
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“ The following outline of costs assessment was written for NSW but the procedure is similar in the other states. This publication will be expanded to cover cost assessment in the other states in due course. In the interim refer to the relevant State Supreme Court. NSW Procedure ”
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“ The Personal Property Securities Register Australian Financial Security Authority ”
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“ Mortgages 1001 Conveyancing Answers (NSW) ”
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“ This is a practical, matter-based publication. It is designed to provide the explanation and tools practitioners will need to readily document security arrangements using personal property as security when called upon to do so. The security agreements are flexible enough to secure any obligation at ... ”
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“ The Act defines a number of key concepts that must be understood in order to understand the legislation, the register, and registrations and security agreements. Attachment happens when either value is given for the security interest or the grantor does an act by which the security interest arises. ”
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“ Taking good instructions The use of precedent Retainer Instructions ensures that all important issues are considered, instructions which cannot be contradicted later are recorded, costs discussed and the scope of the retainer clearly defined. ”
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“ The following precedents are available on the matter plan: No security loan agreement: adapted for use with a security agreement. ”
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“ Defined in s 14, the following are likely scenarios in which these interests would arise: An interest claimed by an unpaid seller of goods. ”
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“ The Act in ss 41 to 53 deals with the various situations in which a purchaser takes title to personal property free of secured interests. Where property is described by serial number ”
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“ A security interest is only effective if it has attached to the collateral, being the personal property, that constitutes the security. The attachment rule provides that a security interest attaches to collateral when the grantor has rights or the power to transfer rights in the collateral and the ... ”
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“ Perfection is a key concept. An attached security interest is perfected by the secured party providing public notice of its secured interest by: registering that interest in the register; ”
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“ Most practitioners will perfect a security interest by registering it unless they have written acknowledgement from their client that the client has possession or control of the collateral. The Personal Property Securities Act 2009 enables a security interest to be registered as soon as a party has ... ”
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“ The collateral must be described as either: consumer property: personal property held by an individual, other than personal property held in the course or furtherance, to any degree, of carrying on an enterprise to which an ABN has been allocated; or ”
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“ The regulations either require or permit certain collateral to be described by serial number in a registration. Consumer property that is an aircraft, a motor vehicle or a watercraft must be described by serial number. A serial number for a motor vehicle is the vehicle identification number; if ... ”
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“ A secured party group can comprise one or more secured parties, but normally it will comprise only one. Law stationers and law firms who provide registration and searching services will register as a secured party group. A secured party group is allocated a number and an access code known only to ... ”
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“ The verification statement is defined by s 155 and is given by the registrar in approved form to the secured party, who is called the statement holder under s 157. The statement holder must give notice of the verification statement in the approved form to the grantor as soon as reasonably ... ”
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“ Transitional security interests and migrated registrations The Personal Property Securities Act 2009 established a system for the creation, priority and enforcement of security interests in personal property. All existing security interests created before the Act commenced and registered on one of ... ”
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“ The priority rules established by the Act replace the former common law and equitable rules which governed priority of security interests and are very similar to old system title priorities under registration of deeds legislation. The new rules apply to two or more competing security interests. If ... ”
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“ The administrative process The Act sets out a procedure for disputing registrations, called the amendment demand administrative process. This process is only available in the circumstances set out within s 179 of the Act. The administrative process involves four main steps: ”
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“ Only a current registration can be renewed and therefore it can only be renewed before its expiry date. It is important that practitioners advise their clients to keep track of the registration expiry date. A ‘Registrations due to expire report’ can be generated from a PPSR account. To extend the ... ”
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“ If a grantor or an interested person, for example, a purchaser of an asset or business, wishes to ensure that personal property is free of any security interest then that person must obtain either: a statement in writing setting out that the amount or obligation that is secured by the relevant ... ”
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“ Chapter 4 of the Act sets out the provisions for enforcement of security interests. It provides secured parties with remedies additional to those in their agreements under statute and at common law or in equity. The Act in s 111 imposes a general standard of honesty and commercial reasonableness in ... ”
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“ Remedies available to a secured party on the grantor's default include the rights to: Seizure ”
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“ The Act requires notices to be in writing: s 286. A notice must be given to a registered secured party at the address specified in the registration by leaving it there or sending it there by prepaid post, by fax or by email: s 287. If there are two or more secured parties, one notice to the ... ”
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Notice to higher priority parties - Enforcement of security interests in liquid assets - Section 121
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“ The grantor and other secured parties with a superior interest can object to the proposed enforcement. The grantor's right to redeem has priority over any other person's right. ”
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