Commonwealth Consolidated Acts

PERSONAL PROPERTY SECURITIES ACT 2009 - SECT 341

General rules

  (1A)   For the purposes of subsection   340(2), a secured party has control of personal property if:

  (a)   the secured party has control of the property within the ordinary meaning of the term "control"; or

  (b)   the secured party has control of the property within the meaning of Part   2.3 (possession and control of personal property); or

  (c)   in a case in which the personal property is inventory or an account--the secured party has control of the inventory or account because of:

  (i)   paragraph   (a) or (b); or

  (ii)   subsection   (1), (2), (3) or (4); or

  (d)   in a case in which the personal property is an ADI account--the secured party has control of the account because of paragraph   (a) of this subsection or section   341A.

  (1B)   For the purposes of subsection   340(5) and this section:

  (a)   inventory has its ordinary meaning; and

  (b)   the definition of inventory in section   10 does not apply.

Control of inventory

  (1)   For the purposes of subsection   340(2), a secured party has control of inventory if:

  (a)   the secured party and the grantor have agreed in writing that the grantor:

  (i)   will specifically appropriate the inventory to the security interest; and

  (ii)   will not remove any specifically appropriated inventory without previously obtaining the specific and express authority of the secured party to do so; and

  (b)   the grantor's usual practice is to comply with the agreement.

Control of accounts

  (2)   For the purposes of subsection   340(2), a secured party has control of the following kinds of accounts (the relevant account ) in the circumstances set out in subsections   (3) and (4) of this section:

  (a)   an account mentioned in paragraph   340(5)(a);

  (b)   an account that is the proceeds of inventory.

  (3)   The secured party has control of the relevant account if:

  (a)   the secured party, and the person to whom the relevant account is owed, have agreed in writing that amounts paid in discharge of the relevant account must be deposited into a specified ADI account; and

  (b)   the usual practice is for such amounts to be so deposited; and

  (c)   the secured party controls the ADI account within the meaning of paragraph   (1A)(d); and

  (d)   depositing any such amounts into the specified ADI account does not result in any person coming under a present liability to pay:

  (i)   the person to whom the relevant account is owed; or

  (ii)   if the person to whom the relevant account is owed is a body corporate--a related body corporate (within the meaning of the Corporations Act 2001 ).

  (4)   If the secured party is a transferee of the relevant account, the secured party has control of the relevant account if payment by the account debtor to the secured party would discharge the obligation of the account debtor under subsection   80(8) to the extent of the payment.