Commonwealth Consolidated Acts Commonwealth Consolidated ActsProperty subject to a possessory security interest
(1) If:
(a) a company is under administration; and
(b) property of the company is subject to a possessory security interest; and
(c) the administrator disposes of the property by way of sale;
then:
(d) if the net proceeds of sale equals or exceeds the total of the debts secured by:
(i) the possessory security interest; and
(ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;
the administrator must:
(iii) set aside so much of the net proceeds as equals the total of those debts; and
(iv) apply the amount so set aside in paying those debts; or
(e) if the net proceeds of sale fall short of the total of the debts secured by:
(i) the possessory security interest; and
(ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;
then:
(iii) the administrator must set aside the net proceeds; and
(iv) the administrator must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and
(v) if any of those debts is not fully paid--so much of the debt as remains unpaid may be recovered from the company as an unsecured debt.
PPSA retention of title property
(1A) If the administrator of a company disposes of PPSA retention of title property of the company by way of sale, then the administrator must apply the net proceeds of the sale in the same way as a secured party is required, under section 140 of the Personal Property Securities Act 2009 , to apply an amount, personal property or proceeds of collateral received by the secured party as a result of enforcing a security interest in the property.
Note: PPSA retention of title property does not include property that is subject to a retention of title clause (see section 9, definitions of PPSA retention of title property and retention of title clause ). Subsection (2) deals with property that is subject to a retention of title clause.
Property subject to a retention of title clause
(2) If:
(a) a company is under administration; and
(b) property is used or occupied by, or is in the possession of, the company; and
(c) another person is the owner of the property; and
(d) the property is subject to a retention of title clause under a contract (the original contract ); and
(e) the administrator disposes of the property by way of sale;
then:
(f) if the net proceeds of sale equals or exceeds the total of:
(i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and
(ii) if there are one or more securities over the property--the debts secured by the securities;
the administrator must:
(iii) set aside so much of the net proceeds as equals that total; and
(iv) apply the amount so set aside in paying that total; or
(g) if the net proceeds of sale fall short of the total of:
(i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and
(ii) if there are one or more securities over the property--the debts secured by the securities;
then:
(iii) the administrator must set aside the net proceeds; and
(iv) the administrator must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and
(v) if any of those debts is not fully paid--so much of the debt as remains unpaid may be recovered from the company as an unsecured debt.
Note: Property that is subject to a retention of title clause does not include PPSA retention of title property (see section 9, definitions of PPSA retention of title property and retention of title clause ). Subsection (1A) deals with PPSA retention of title property.