The Final Report on the statutory review of the Personal Property Securities Act 2009 (the Act) has been released.
The Report concludes that while the Act has successfully established a single, national set of rules for secured credit using personal property, more work can be done to make it clearer, easier and cheaper for businesses and consumers to use their assets as security.
The Report rejects repealing the Act but does recommend deleting certain sections.
Consistent with its finding that there is no one single step that by itself will produce a major improvement to the Act but rather, improvement needs to come from the making of many small changes, the report makes 394 recommendations for improvements to the Act and the Personal Property Securities Register.
“• Simplify the content of the Act and the Regulations, by using more streamlined language and removing provisions that are of marginal benefit. This will make it easier for users to navigate their way around the Act and the Regulations, and to understand what the Act is trying to do.
• Simplify the Register, by reducing the number of decision points for users and making the remaining decision points clearer and easier to answer. This will make it easier for both registrants and searchers to use the Register with confidence.
• Revisit the exclusions. The Act excludes a number of types of property and security interest from its reach, for a range of reasons. The Act will best be able to achieve its objectives if it can apply as broadly as possible.
• Use more customary and intuitive terminology. The Act uses a number of terms that are unfamiliar to Australian readers, or uses familiar terms in unfamiliar ways. The Act would be much easier to understand if it used more familiar terminology, and in more intuitive ways.
• Explain the concepts. The Act does not explain a number of key underlying concepts, in particular concepts that help to explain when a security interest can attach to collateral, and what that “collateral” is. Those concepts are however critical to understanding how the Act works. The Act would be much easier for all to use, if those concepts could be clarified and explained.
• Better reflect Australian conditions. Because the Act is based on models from other jurisdictions, it has inherited a range of policy outcomes that were appropriate in those jurisdictions at the time they enacted their legislation, but may not be appropriate for Australia today. The Act will be a much better piece of legislation if those inherited policy outcomes can be re-assessed, and then adjusted to reflect current Australian expectations where appropriate.”
The Government is considering the recommendations.