PROBLEMS RAISED BY UNCOLLECTED GOODS UNDER THE PPSA

When landlords or bailees take possession of uncollected goods, they may be exposed to loss of priority due to the application of the PPSA.  The risk can be mitigated by registration on the PPSR, by contractual drafting to avoid the creation of a security interest or by the application of uncollected goods legislation.  But in what circumstances will such measures be effective against a liquidator or third-party claimant to the goods?  

Last Tuesday morning I presented a seminar to the ARITA Vic/Tas annual conference on the problems facing insolvency administrators, landlords and bailees arising from the introduction of the PPSA.

A copy of the paper presented and the overheads from the seminar are available at the links:

Some the of key takeouts from the seminar:

  • It is common practice that landlords fail to register leases on the PPSR even though they have security interests over the goods of a defaulting tenant. They can be left vulnerable to vesting risk and disputes with third parties over title to goods when they want to dispose of them.
  • It is possible to structure a lease so that rights over uncollected goods do not give rise to a security interest, by use of deemed abandonment.
  • Even where security interests vest, or are otherwise lost, interests in uncollected goods can be claimed by a landlord in possession or by other bailees if they arise at law, such as common law, equitable or statutory liens. The so-called “uncollected goods” legislation in each state and territory provide protection of this kind.

See the seminar paper for an exploration of these issues looking recent cases I have appeared in dealing with these issues, and other authorities. The cases include:

Tasman Logistics Services Pty Ltd v Seaco Global Aust Pty Ltd [2020] VSC 100

Jayfield Pty Ltd v Cussen [2020] VSC 380

Scandi International Pty Ltd v Larkfield Industrial Estate Pty Ltd (No 2) [2018] VCC 628

Some time in late 2019 I received the invitation to present this seminar from Adrian Hunter, secretary of the Vic/TAs committee. Who would have thought then that the presentation would be delivered almost 2 years later! Luckily fortune smiled on this year’s conference which went ahead just before the most recent lockdown. It was great to be able to present to a live audience for the first time in quite a while.

Thank you ARITA.

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