A consignment is another commercial transaction that is not currently specifically registrable but which will become registrable under the Personal Property Securities Act 2009 Cth from May 2011.
Under the Personal Property Securities Act (section 12(2)(h)) a consignment (whether or not a commercial consignment) is a registrable security interest. Failure to register may result in loss of priority.
In general terms, a consignment is property sent to an agent for sale, storage or shipment (Macquarie Dictionary).
The interest of a consignor who delivers goods to a consignee under a commercial consignment may be registered as a purchase money security interest (section 14(1)(d) PPS Act) .
Section 10 of the PPS Act states that “commercial consignment” means a consignment if:
(a) the consignor retains an interest in goods that the consignor delivers to the consignee; and
(b) the consignor delivers the goods to the consignee for the purpose of sale, lease or other disposal; and
(c) the consignor and the consignee both deal in goods of that kind in the ordinary course of business;
but does not include an agreement under which goods are delivered to:
(d) an auctioneer for the purpose of sale; or
(e) a consignee for sale, lease or other disposal if the consignee is generally known to the creditors of the consignee to be selling or leasing goods of others.
There are special rules if the consignment is not registered and the consignee becomes bankrupt or insolvent and a person acquires the personal property from the consignee.
A consignor whose security interest is lost would be entitled to compensation which would entitle them to prove in the consignee’s insolvency.