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Enforcing your rights - what you need to know

 Marine engines sold

Our client delivered two marine engines to an engineering workshop for repair. Shortly afterwards, the workshop shut its doors. The appointed liquidator, unaware the engines didn’t belong to the repairer, sold all ‘stock’ at auction, including the two engines belonging to our client.

On returning to pick up the engines our client was greeted by an empty repair shop. Our client was informed their engines had been sold and they had no rights of recovery as they had failed to register their interest in the engines on the Personal Property Securities Register (PPSR).

Wrong. The relationship between our client and the repairer is not a Personal Property Securities Act  (PPSA) matter, so registration was not required.

We had a quiet word with the liquidator, resulting in the immediate payment to our client for the full value of the engines.
Moral: Always get advice when your property is seized by an insolvency practitioner.

Consignment equipment taken

Our client was attempting to sell excess woodworking equipment. They had left their equipment on consignment with a selling agent whose business involved the sale of woodworking machinery.

When the agent’s business collapsed, the liquidators retained possession of our client’s machinery, arguing our client had failed to register their interest in the machinery on the PPSR.

Wrong. While the PPSA does apply to commercial consignment stock, it makes an allowance that such stock will not vest in the liquidated company. In particular, commercial consignment stock does NOT include stock supplied to an agent where the agent’s creditors are aware the agent sells such stock on behalf of others.

The liquidators returned the woodworking equipment to our client.

Moral: Don’t take “no” for an answer, and get appropriate advice.

Financier goes too far

Red Safety Pty Ltd had legitimately acquired $80,000 of machinery from a retailer. You can imagine their surprise some months later when a recovery agent appeared on their doorstep demanding the return of the machinery.

The agent informed Red Safety that their client, one of the ‘Big Four’ banks, still had a Security Interest in the machinery and, as the retailer had recently collapsed, they were coming to recover the machinery.

Wrong. The PPSA makes it clear that Red Safety takes the machinery free of any existing Security Interest (including the bank’s) where the machinery is sold in the retailer’s normal course of business, which it was.

Moral: Don’t get pushed around, and get the proper advice.

When is a hire not a hire?

Our client had hired out a number of high-value gensets to a remote mining customer. Declining commodity prices resulted in the closure of mining operations over a period of time and, six months later, the complete collapse of the mining company.

As is often the case, our client left the gensets on site in the hope of securing alternative hire arrangements with neighbouring mining operations. The customer was happy as they avoided the demobe costs. Unfortunately these arrangements were verbal.

Receivers appointed to the collapsed miner immediately seized the generators, arguing they were on hire and our client had not complied with the PPSA by registering their interest in the generators (even though the equipment had not been hired for the past six months).

Prolonged argument from us ensued, with the final verdict being in our client’s favour and the return of the gensets.
Moral: Document all agreements and get EDX involved.

PPSR your hired mining equipment
What’s yours is the miner’s. To avoid a mine closure leading to loss of hired equipment, make sure you document any agreement to leave the equipment on site.


EDX started its roots in New Zealand where EDX Limited has been consulting and providing registration services on New Zealand's equivalent of the PPSR for more than a decade. 

EDX Australia Pty Ltd commenced in 2010 and has established a network of Consultants making it the only national PPSA consulting and registration services provider in the country.

About EDX Pty Ltd



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