Commonwealth Consolidated Acts Commonwealth Consolidated ActsAttachment required for enforceability
(1) A security interest is enforceable against a grantor in respect of particular collateral only if the security interest has attached to the collateral.
Attachment rule
(2) A security interest attaches to collateral when:
(a) the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party; and
(b) either:
(i) value is given for the security interest; or
(ii) the grantor does an act by which the security interest arises.
Time of attachment
(3) Subsection (2) does not apply if the parties to a security agreement have agreed that a security interest attaches at a later time, in which case the security interest attaches at the time specified in the agreement.
(4) To avoid doubt, a reference in a security agreement to a floating charge is not a reference to an agreement that the security interest created by the floating charge attaches at a time later than provided under subsection (2).
Goods leased, bailed, consigned or sold under a conditional sale agreement.
(5) For the purposes of paragraph (2)(a), a grantor has rights in goods that are leased or bailed to the grantor under a PPS lease, consigned to the grantor, or sold to the grantor under a conditional sale agreement (including an agreement to sell subject to retention of title) when the grantor obtains possession of the goods.
(6) Subsection (5) does not limit any other rights the grantor may have in the goods.
Note: A security interest may attach to crops while they are growing, and to the products of livestock, before they become proceeds of the crops or livestock (for example, wool before it is shorn). See subsections 31(4) and (5) (meaning of proceeds ) and section 84A (security interests in crops and livestock).