Personal Property Securities (Corporations and Other Amendments) Act 2010 (96 of 2010)

Schedule 1   Corporations Act 2001

Part 3   Charges and chargees

Divison 1   Specific amendments

40   After section 441E

Insert:

441EA Sale of property subject to a possessory security interest

Scope

(1) This section applies if:

(a) a company is under administration; and

(b) property of the company is subject to a possessory security interest; and

(c) the property is in the possession of the secured party; and

(d) the secured party sells the property.

Distribution of proceeds of sale

(2) The secured party is entitled to retain proceeds of the sale as follows:

(a) if the net proceeds of sale equals the debt secured by the possessory security interest - the secured party is entitled to retain the net proceeds;

(b) if the net proceeds of sale exceeds the debt secured by the possessory security interest - the secured party is entitled to retain so much of the net proceeds as equals the amount of the debt secured by the security interest, but must pay the excess to the administrator on behalf of the company;

(c) if the net proceeds of sale fall short of the debt secured by the possessory security interest - the secured party is entitled to retain the net proceeds.

Subdivision C - Property not subject to security interests

441EB Scope of Subdivision

This Subdivision does not apply in relation to the enforcement of a right, or the performance or exercise of a function or power, if the enforcement, performance or exercise is authorised by (or because of) a transaction or dealing that gives rise to a security interest in the property concerned.

Example: An example of a transaction or dealing in relation to which this Subdivision does not apply because of this section is a commercial consignment of personal property. Such a transaction gives rise to a PPSA security interest because of section 12 of the Personal Property Securities Act 2009. The consigned property is PPSA retention of title property of the company (see sections 51F and 435B).

Note: Subdivision B (property subject to security interests) may apply in relation to transactions or dealings to which this Subdivision does not apply because of this section. For example, Subdivision B would apply in relation to a commercial consignment of personal property, because such a transaction gives rise to a PPSA security interest.