How to survive the Personal Property Securities Act

PLEASE NOTE: Brisbane February PPS seminar cancelled due to the flood disaster. Our clients and friends in Brisbane have bigger issues to worry about than securities law. Adelaide and Perth February PPS seminars have also been cancelled. Unfortunately our December flyers to those cities were delayed in the Christmas mail and arrived too close to Christmas to have any chance of attracting bookings. Our apologies to anyone who has found the flyer on returning to work after Christmas and was intending to book for February. The April dates stand, so please come then instead.

The best, most understandable, most useful training on this very complex but very important law - book now

The PPS Act is scheduled to come into force in Australia in May 2011. If you work in credit management, you need to understand lots of law, and this will be the biggest credit law change of your career! If you don't understand it, you risk looking very stupid and costing your company a lot of money.

• Overview
• Our presenters
• If you're only starting to prepare now, it's probably not the end of the world - here's why
• What were the traps for NZ businesses, and how can you avoid them?
• Why should you attend one of our seminars on the Australian PPSA?
• What's in our seminar?
• Book now!
• When? where? how much?

Overview

The Australian Personal Property Securities Act was initiated because the similar New Zealand Act has been very successful ... but many of those working in credit management and commercial law in New Zealand had to learn about it the hard (expensive) way. For example, after the Act came into force in New Zealand in 2002, a lawyer wrote a piece in the New Zealand Law Journal criticising an early decision on the Act... and got it absolutely wrong... and looked really stupid.

Like many other lawyers and most creditors, he hadn't understood how the Act changed ... everything. The early cases in New Zealand dealt with "owners" of goods worth hundreds of thousands of dollars who simply couldn't believe they could lose their rights in those goods through the operation of the Act.

There were thousands of creditors in similar situations but with smaller losses who eventually worked out that there was no point in going to court. They didn't have a leg to stand on. Generally they found themselves losing their assets to an administrator or liquidator or receiver for a bank or other financier who understood the law better.

The Australian PPS Act sets up a comprehensive internet-based register of charges. Among other things, the law relating to retention of title, hire purchase, and long-term leases of property will be dramatically changed.

Our presenters

Sydney commercial lawyer David Francis B.A. LL.M. was made a Life Member of the Institute of Credit Management, partly in recognition of his significant commitment to enhancing the professionalism of credit managers through education. He has taught law to generations of credit professionals and insolvency practitioners since the 1970s. He has presented credit law seminars throughout Australia for Hattaway & Associates since 2001. David is Australasia's most experienced credit educator, and we know of no-one more highly respected. He knows what you don't know and what you need to know.

New Zealand credit expert, Peter Hattaway LL.B., has been teaching PPSA to credit staff for the last 10 years. Hattaway & Associates (and Peter himself) have trained credit staff throughout Australia and New Zealand (and as far away as India), since 1997. In 2002, Peter co-authored a book on the New Zealand PPSA - the only book on this topic aimed at non-lawyers (though law firms also bought large numbers of copies). Interestingly, staff at the New Zealand PPS Register tried to buy more copies a few years ago - though it's long out of print - saying that the two copies in their office are the first books they refer to when legal issues arise.

Peter writes the course materials for Hattaways' Law of Credit Management seminars in both Australia and New Zealand. He has edited the online Australian Credit Management Law Bulletin since 1997 and the New Zealand Credit Management Law Bulletin since 2001.

They are experts in guiding lay-people through complex law in a way that ensures that everyone understands it. This is complex law, but they understand what you need to know, and they can explain what you need to understand. The course will use a case study and example approach and will also look at the most relevant cases from overseas.

Don't be complacent! This will be the biggest credit law change of your career! If you don't understand it, you risk looking very stupid and costing your company a lot of money.

If you're only starting to prepare now, it's probably not the end of the world - here's why

New Zealand has had a Personal Property Securities Act since 2002, so you can learn from the mistakes made by New Zealand creditors. The commencement of the NZ Act was delayed (as in Australia). That meant that many of the people who attended training about the Act early on had forgotten most of what they were taught by the time the Act came into force. Businesses which left their training and preparation for the PPSA to the last minute, in the last few months before the Act came into force, found that this had hidden benefits, particularly as there was a 6-month transition period after the Act commenced which gave them extra time to get ready. Australia's transition period is 24 months. It's not too late to start.

What were the traps for NZ businesses, and how can you avoid them?

1. Ignore it and lose lots and lots of money. The first NZ PPSA cases were brought by businesses whose managers had absolutely no understanding of the law and had not registered a security but simply couldn't believe that their rights to hundreds of thousands of dollars of their property had been taken away. But it had. When businesses went into liquidation or administration, the banks (who understood the Act) recovered a lot more than they might have expected, at the expense of ignorant trade creditors. Here's an example - the very first PPSA case to reach the New Zealand High Court.
   
   
2. This is the hardest law most credit managers (or business managers of any sort) will ever have to come to grips with. The law was so complex and such a dramatic change that many lawyers didn't understand it properly. If they did understand it, they still found it very hard to explain to non-lawyers. Most business people who heard lawyers trying to explain the Act came away with their heads spinning.
   
   The feedback we've had is that this is what has happened in Australia, too. For example, in July this year Peter Hattaway presented a seminar in Melbourne on New Zealand law. His client was an oil company which was centralising some of its New Zealand credit management functions to Melbourne and needed a seminar from someone who understood both the New Zealand and Australian law, and how they differed. "When I explained the New Zealand PPSA to them, you could see the lights going on. These were bright, senior credit managers and analysts who had attended other sessions on the Australian PPSA but they understood the Australian PPSA properly for the first time through my explanation of the New Zealand process. I've been teaching PPSA for 10 years so I know what people need to know and how to teach it."
   
   (If you're interested, here's an article Peter Hattaway wrote for a New Zealand business magazine in 2006, explaining why the PPSA was coming to Australia and describing his first attempt to explain it - in 15 minutes - to a group of senior Australian credit managers.)
   
   
3. Don't lose sight of the fact that the Act does provide benefits to smart creditors. A lot of NZ trade creditors saw only the downside of the Act but it did provide useful new tools.
   
   Here's a simple (and short) example: let's say that after the Act comes into force, you sell some goods to a "cash" customer, a consumer named Joe Ratbag, who pays by cheque and takes the goods away. A few days later, the cheque is dishonoured by Joe's bank. However, on the back of the cheque, you had stamped a clause saying that if the cheque bounced, you could take the goods back. Joe signed on the back, and this gives you the right to register a security agreement on the Personal Property Securities Register claiming an interest in those goods, provided you do so within 15 business days (s62). In fact, in a Canadian PPSA case in 2001, the consumer bought the goods with a rubber cheque, then went straight to a lender and used the goods as security for a loan. The lender also registered a security... and registered before the seller of the goods. For reasons we needn't go into here, when the goods were recovered, the seller had priority ahead of the lender, and the same would apply in Australia.
   
   
4. Ignore it at your peril. Some Kiwi businesses concluded that the PPSA was just too hard, so they looked for reasons to ignore the Act. Many of these businesses, having lost large amounts of money that they didn't need to lose, have since registered their securities on the PPS Register. For example, one of our clients decided not to register because the pipes they sold always became part of the land and therefore couldn't be repossessed. Their CFO changed his mind the day one of their customers went bust with $50,000 worth of those pipes sitting in its yard for all to see... but unable to be recovered because the creditor hadn't spent $3 and two minutes on the internet registering their retention of title clause.
   
   
5. Even now, over eight years after the Act commenced, many New Zealand suppliers still don't get it. For example, a New Zealand business newspaper article late in 2008, when businesses were starting to fall over as a result of the global financial crisis, was entitled Shocked furniture suppliers bear the brunt of Eon receivership. It described angry scenes as suppliers tried unsuccessfully to remove their goods from the premises of a failed retailer. It quoted the receiver of the business as saying, "suppliers should have registered an online claim against their goods on the Personal Property Securities Register for a cost of $3." And of course he was right, but lots of businesses still have no idea.
   
   

Why should you attend one of our seminars on the Australian PPSA?

This one-day seminar will be the most user-friendly PPS seminar available, from presenters who understand the PPSA, understand the realities of credit management, know how to teach complex law to non-lawyers, and understand how to apply this knowledge to teaching the PPSA.

Only 40 attendees per seminar, so Book now!

Earlybird discounts apply - up to $155 per person for those booking and paying in December.

What's in our seminar?

David and Peter will take you from where you are now to where you will be under the PPSA, and what you need to do to get there, and provide comprehensive written materials to refer to afterwards.

You need to know:

1. What are the fundamental concepts - the new terms and ideas in the Act, the logic behind priority under the PPSA, the way the temporary perfection period works, etc? These are things you absolutely need to understand in order to plan make the Act work for your business. At the very least, you should leave the seminar with:
   • an understanding of the standard process that will apply to your typical PPSA transactions
     
     
   • a checklist of what you need to do to cover the bulk of your customer base
     
     
2. How do they apply to the sorts of real-life situations credit staff have to deal with? What happens if your salespeople release goods before you've registered a security? What happens if your customer goes into administration during the temporary perfection period and before you have registered your security? And so on.
   
   
3. What must you do to get your current ROTs or other securities registered? Documentation, data collection, software, etc. What do you do if you have thousands of missing or unsigned credit applications?
   
   
4. What new opportunities does the PPSA offer?

Book now!

When? where? how much?

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Seminars overview and registration: Australia / New Zealand

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