Enforcement under the PPS Act

Chapter 4 of the Personal Property Securities Act 2009 (Cth) (PPS Act) contains rights and remedies of enforcement of security interests on the default under a security agreement. This means security agreements do not need to include these remedies as parties to the agreement can instead rely on the Ch 4 enforcement provisions in the PPS Act.

It is useful to note that the Ch 4 enforcement provisions complement other rights and remedies available. Such additional rights may be contained in statute law, common law or equity. There are some security interests to which Ch 4 does not apply: s 109 of the PPS Act. For example, Ch 4 does not apply to interests in goods that are located outside Australia.

Generally, under Ch 4, on the default of a grantor under a security agreement, the secured party can commence enforcement action, and the first step in enforcement is for the secured party to seize the collateral. If a secured party has a security interest that is subordinate to another security interest in the collateral, the secured party with the higher priority security interest is entitled to seize the collateral from the subordinate secured party. Having seized and obtained possession of the collateral, the secured party may either dispose of or retain the collateral. This guidance note overviews each of these matters, and is designed to be a good starting point for legal practitioners who need to consider matters relating to enforcement under the PPS Act.

See Enforcement under the PPS Act.