Explanatory MemorandumCirculated By the Authority of the Attorney-General, the Honourable Robert Mcclelland MP
1.1 The Personal Property Securities (Corporations and Other Amendments) Bill 2010 (the Bill) contains three schedules:
- Schedule 1: Corporations Act 2001 ;
- Schedule 2: Personal Property Securities Act 2009 ; and
- Schedule 3: Amendment of other Acts.
1.2 Schedule 1 makes changes to Corporations Act 2001 (Cth) to align it with the Personal Property Securities Act 2009 ('PPS Act'). Schedule 1 would:
- amend terminology used in the Corporations Act to apply the functional approach of the PPS Act to those sections of the Corporations Act that deal with charges;
- Currently, only transactions which create charges or mortgages are security agreements under the Corporations Act. But the PPS Act uses a functional approach of treating alike transactions which have the same effect of securing the payment or performance of an obligation. These security interests would, therefore, also be included as PPSA security interests in the Corporations Act.
- extend the Corporations Act concept of property to include PPSA retention of title property ;
- replace Chapter 2K (Registration of company charges) because the PPS Act provides for the registration of security interests in personal property but retain provisions equivalent to sections 266 and 267 in Chapter 2K (which provide that charges are void against an administrator or liquidator in certain circumstances);
- apply appropriate transitional and application provisions; and
- change references to floating and fixed charges to circulating and non-circulating charges respectively but with the intention of maintaining existing rights, for example, employee preferences under CA, section 561.
1.3 Schedule 2 would amend the PPS Act to simplify the transitional provisions.
1.4 Schedule 2 would also make the PPS Act consistent with existing State and Territory provisions on the enforcement of security interests in agricultural products (Chapter 6).
1.5 Schedule 3 would make minor consequential amendments to other Commonwealth legislation (Chapter 7).