The Personal Property Securities Act 2009 NSW (PPSA) has established a framework that allows companies and individuals to secure their debts and obligations by way of registration on the Personal Property Securities Register (PPSR). Failure to register on the PPSR correctly, or within the necessary time frame can have dire consequence as a priority against other secured parties may be lost and third parties may take the subject property free of the interest. It is necessary that secured parties are aware of the legislative requirements for registration particularly under the Corporations Act. S588FL stipulates that secured parties who have failed to register their interest in collateral within 20 days of entering into the agreement, may risk losing their interest if the grantor becomes insolvent within 6 months of the PPSA registration. In the case of Kaizen Global Investments Ltd v Australia New Agribusiness and Chemical Group [2017] FCA 431, the secured party (Kaizen) failed to register its security interest in the collateral (being $5 million share mortgage) within 20 business days of the agreement and ultimately lost its security and became an unsecured creditor when the grantor company went into liquidation. In its application to the Court, Kaizen attempted to fix a later time for registration on the PPSR, which was dismissed due to the delay. This is one of many examples illustrating the importance of securing your interests in time.

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