Commonwealth Consolidated Acts Commonwealth Consolidated Acts
1 After subsection 6(1)
Insert:
(1A) This Act applies to a security interest in an investment entitlement if:
(a) the investment entitlement intermediary in relation to the investment entitlement is located in Australia; or
(b) the grantor is an Australian entity.
Note: For when a person is located in a jurisdiction, see section 235.
2 Paragraph 6(2)(e)
Repeal the paragraph, substitute:
(e) the intangible property is created, arises or is provided for by either or both of the following:
(i) a law of the Commonwealth, a State or a Territory;
(ii) the general law (to the extent to which it applies in Australia, a State or a Territory).
3 At the end of paragraph 8(1)(d)
Add "(within the ordinary meaning of the term "accounts")".
4 Subsection 8(2) (at the end of the table)
Add:
6 | a provision prescribed by regulations made for the purposes of this item | an interest mentioned in subsection (1) (including an interest prescribed by regulations made for the purposes of paragraph (1)(l)) that is prescribed by regulations made for the purposes of this item. |
5 Section 10 (definition of ADI account )
Repeal the definition, substitute:
"ADI account" means an account, within the ordinary meaning of that term, kept by a person (whether alone or jointly with one or more other persons) with an ADI that is payable on demand or at some time in the future (as agreed between the ADI and the person or persons).
Example: A savings account, or a term deposit, kept with an ADI.
6 Section 10 (definition of Australia )
Omit "subsection 7(4)", substitute "section 7".
7 Section 10
Insert:
"jurisdiction" , in which personal property, or an individual, is located, has a meaning affected by subsections 235(6) and (7).
8 Section 10
Insert:
"National Credit Code" means Schedule 1 to the National Consumer Credit Protection Act 2009 , and includes regulations made under section 329 of that Act for the purposes of that Schedule.
9 Section 10 (paragraph (b) of the definition of registration )
Omit "paragraph 148(c);", substitute "paragraph 148(c).".
10 After subsection 12(4)
Insert:
(4A) An ADI may take a security interest in an ADI account that is kept with the ADI.
11 After subsection 14(2)
Insert:
(2A) Despite paragraph (2)(c), a purchase money security interest includes an interest if:
(a) the interest is covered by subsection (1); and
(b) the interest is in collateral that (at the time the interest attaches to the collateral) the grantor intends to use predominantly for personal, domestic or household purposes; and
(c) the collateral is of a kind that is required or permitted by the regulations to be described by serial number.
12 Section 23
Omit:
(a) goods in the possession of a common carrier;
Substitute:
(a) goods transported by a common carrier;
13 Subsection 26(1)
Omit "(1)".
14 Subparagraph 26(1)(b)(i)
Omit "and", substitute "or".
15 Subsection 26(2)
Repeal the subsection.
16 Subsection 32(2)
After "investment instrument", insert "or an investment entitlement".
17 Subsection 39(1)
Omit all the words after "subsection (2)" (not including the note), substitute:
if, immediately before the collateral became located in Australia, and at the time it became so located:
(a) the security interest was effective; and
(b) the security agreement providing for the security interest was enforceable against third parties.
18 Subsection 39(2)
Repeal the subsection, substitute:
(2) This subsection covers the period:
(a) starting at whichever of the following times is applicable:
(i) if the law of the foreign jurisdiction provides for the perfection (and the effect of perfection or non - perfection) of the security interest--when the security interest last became perfected under that law;
(ii) if subparagraph (i) does not apply to the law of the foreign jurisdiction, but that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest--when the security interest, or such a notice, was so registered or recorded (or was last so registered or recorded);
(iii) if neither subparagraph (i) nor (ii) applies to the law of the foreign jurisdiction--when the security interest last became enforceable against third parties under that law; and
(b) ending when the property becomes located in Australia.
(2A) However, a security interest in collateral is not taken to have been continuously perfected under subsection (1) if, immediately before the collateral became located in Australia:
(a) in a case in which the law of the foreign jurisdiction provides for the perfection (and effect of perfection or non - perfection) of the security interest--the security interest was not perfected under that law; or
(b) in a case in which paragraph (a) does not apply to the law of the foreign jurisdiction, but that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest--the security interest, or such a notice, was not so registered or recorded.
19 Subsections 40(1) and (2)
Repeal the subsections, substitute:
Continuous perfection prior to relocation event
(1) If the law of a foreign jurisdiction has governed a security interest in intangible property, or financial property, the security interest is taken to have been continuously perfected for the period covered by subsection (2) if:
(a) either of the following events (the relocation event ) occurs:
(i) the grantor becomes located in Australia;
(ii) the grantor transfers the collateral to a person who is located in Australia; and
(b) immediately before the relocation event, and at the time of that event:
(i) the security interest was effective; and
(ii) the security agreement providing for the security interest was enforceable against third parties; and
(c) as a result of the occurrence of the relocation event, the perfection (and the effect of perfection or non - perfection) of the security interest becomes governed by the law of Australia.
Note 1: For when bodies corporate, bodies politic or individuals are located in a jurisdiction, see section 235.
Note 2: For when laws of other jurisdictions govern a security interest, see Part 7.2.
(2) This subsection covers the period:
(a) starting at whichever of the following times is applicable:
(i) if the law of the foreign jurisdiction provides for the perfection (and the effect of perfection or non - perfection) of the security interest--when the security interest last became perfected under that law;
(ii) if subparagraph (i) does not apply to the law of the foreign jurisdiction, but that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest--when the security interest, or such a notice, was so registered or recorded (or was last so registered or recorded);
(iii) if neither subparagraph (i) nor (ii) applies to the law of the foreign jurisdiction--when the security interest last became enforceable against third parties under that law; and
(b) ending when the relocation event occurs.
(2A) However, a security interest is not taken to have been continuously perfected under subsection (1) if, immediately before the relocation event:
(a) in a case in which the law of the foreign jurisdiction provides for the perfection (and effect of perfection or non - perfection) of the security interest--the security interest was not perfected under that law; or
(b) in a case in which paragraph (a) does not apply to the law of the foreign jurisdiction, but that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest--the security interest, or such a notice, was not so registered or recorded.
20 Paragraphs 41(b) to (j)
Repeal the paragraphs, substitute:
(b) serial number defects;
(c) motor vehicles;
(d) taking in the ordinary course of business;
(e) personal, domestic or household property;
(f) currency;
(g) taking investment instruments or investment entitlements in the ordinary course of trading;
(h) investment instruments;
(i) investment entitlements;
(j) temporarily perfected security interests.
21 Subsection 43(1)
Omit "new value", substitute "value".
22 Subsection 44(1)
Omit ", for new value,".
Note: The heading to section 49 is altered by omitting " investment interest " and substituting " investment instrument ".
23 Paragraph 44(3)(a)
After "leased", insert "for new value".
24 Subsection 51(2)
Omit "an investment entitlement intermediary", substitute "the investment entitlement intermediary".
25 Paragraph 55(5)(b)
Omit "first takes possession", substitute "first perfects the security interest by taking possession or control".
26 Section 55 (note)
Omit "subsection 33(5)", substitute "subsection 32(5)".
27 Subsection 61(2)
Omit "An agreement to subordinate a security interest", substitute "The subordination".
28 Paragraph 61(2)(b)
Omit "the agreement", substitute "the subordination".
29 Subparagraph 64(1)(b)(i)
Repeal the subparagraph, substitute:
(i) the secured party holding the priority interest gives a notice in accordance with subsection (2) to the secured party holding the purchase money security interest;
30 At the end of section 73 (before the note)
Add:
Interests arising under the general law
(7) The priority between an interest in collateral (the general law interest ) that arises by operation of the general law and a security interest in the same collateral is to be determined in accordance with an instrument made under subsection (8) if, and only if:
(a) no law of the Commonwealth (other than this Act and that instrument) provides for the priority between the general law interest and the security interest; and
(b) the instrument provides that this subsection applies to general law interests of that kind; and
(c) the general law interest arises after the instrument comes into effect.
(8) The Minister may make a legislative instrument for the purposes of subsection (7).
(9) Subsection (7) is subject to subsection (1).
31 Subsection 77(1)
Omit "or financial property", substitute ", financial property or an investment entitlement".
32 Subsection 77(3)
After "financial property" (first occurring), insert "or an investment entitlement".
Note: The heading to subsection 77(3) is altered by adding at the end " or investment entitlements ".
33 Subsection 77(3)
After "financial property" (last occurring), insert "or investment entitlement".
34 Subsection 79(1)
Omit "an agreement (whether or not a security agreement)", substitute "a security agreement".
35 Subsection 80(7)
Omit "collateral that is".
36 Subsections 119(1) and (2)
Omit "Consumer Credit Code of a State or Territory", substitute "National Credit Code".
37 Paragraph 128(2)(b)
Repeal the paragraph, substitute:
(b) by lease, if the security agreement so provides; or
38 Subsection 129(1)
Omit "that is commercial property".
39 Subsection 151(1)
Omit all the words from and including "the collateral secures" to and including "the secured party", substitute "the person described in the statement as the secured party is, or will become, a secured party in relation to the collateral (otherwise than by virtue of the registration itself)".
40 Subsection 157(4)
Omit "subsection (1)", substitute "a requirement under subsection (1) to ensure that a notice is given to an individual".
41 After paragraph 171(1)(d)
Insert:
(da) a unique identifier allocated by the Registrar to a registered financing statement;
42 Subsection 235(1)
Omit "(whether the jurisdiction of Australia or a foreign jurisdiction)".
43 At the end of section 235
Add:
Location within Australia
(6) For the purposes of this Act, in the application of this section in relation to Australia:
(a) the jurisdiction in which personal property is located under subsection (1), or in which an individual is located under subsection (5), is the jurisdiction of the State or Territory in which the property, or the individual's principal place of residence, is situated (as the case may be); and
(b) a reference to the law of that jurisdiction is a reference to the law of that State or Territory, and to the law of the Commonwealth as it applies in that State or Territory.
Location within a foreign country that has a federal character
(7) For the purposes of this Act, in the application of this section in relation to a foreign country that is divided into territorial units that have their own rules of law about security interests (distinct from those that apply to the foreign country generally):
(a) the jurisdiction in which personal property is located under subsection (1), or in which an individual is located under subsection (5), is the jurisdiction of the territorial unit in which the property, or the individual's principal place of residence, is situated; and
(b) a reference to the law of that jurisdiction is a reference to the law of that territorial unit, and to the law of the foreign country as it applies in that territorial unit.
44 Subsection 238(1)
Omit "A security interest", substitute "The validity of a security interest".
Note: The heading to subsection 238(1) is replaced by the heading " Main rules ".
45 Subsection 238(1)
Omit "property is located", substitute "goods are located".
46 Subsection 238(2)
Repeal the subsection, substitute:
(1A) At a particular time, the perfection, and the effect of perfection or non - perfection, of a security interest in goods is governed by the law of the jurisdiction (other than the law relating to the conflict of laws) in which the goods are located at that time.
Goods that are moved
(2) Despite subsections (1) and (1A), the validity, perfection, and the effect of perfection or non - perfection, of a security interest in goods is governed by the law of a particular jurisdiction (the destination jurisdiction ), other than the law relating to the conflict of laws, if:
(a) at the time (the attachment time ) the security interest attaches, under that law, to the goods, it was reasonable to believe that the goods would be moved to the destination jurisdiction; and
(b) the goods are currently located in the destination jurisdiction.
(2A) Subsection (2) applies from the attachment time.
47 Subsection 238(3)
Omit "Despite subsections (1) and (2),", substitute "Despite subsections (1) to (2A), the validity, perfection, and the effect of perfection or non - perfection, of".
48 Paragraph 238(3)(b)
Omit "commercial property".
49 At the end of subsection 238(3) (before the note)
Add:
; and (c) the goods are not used predominantly for personal, domestic or household purposes.
50 At the end of section 238 (after the note)
Add:
Goods entered on registers of ships
(4) Despite subsections (1A) to (3), at a particular time, the perfection, and the effect of perfection or non - perfection, of a security interest in goods is governed by the law of a country if:
(a) the goods are entered in a register of ships maintained by the country containing the names and particulars of ships; and
(b) in proceedings in the country, the law of that country governs title to the goods.
51 Subsection 239(5)
Omit all the words after "ADI account", substitute:
if:
(a) the ADI consents in writing; and
(b) applying the law of that other jurisdiction would not be manifestly contrary to public policy.
52 Paragraph 265(e)
After "proceedings", insert ", and what constitutes knowledge".
53 Paragraph 267(1)(b)
Repeal the paragraph, substitute:
(b) a security interest granted by the body corporate, company or bankrupt is unperfected at whichever of the following times applies:
(i) in the case of a company or body corporate that is being wound up--when, on a day, the event occurs by virtue of which the winding up is taken to have begun or commenced on that day (whether under section 513A or 513B of the Corporations Act 2001 , under either section as applied by force of a law of a State or Territory, or otherwise);
(ii) in the case of any other company or body corporate--when, on a day, the event occurs by virtue of which the day is the section 513C day for the company or body, within the meaning of the Corporations Act 2001 (including that Act as it is applied by force of a law of a State or Territory, or otherwise);
(iii) in the case of a bankrupt--when a sequestration order is made against the bankrupt under the Bankruptcy Act 1966 , or when he or she becomes a bankrupt by force of section 55, 56E or 57 of that Act.
54 Subsection 267(2)
Omit ", unless the security interest is unaffected by this section because of section 268".
55 At the end of subsection 267(2)
Add:
Note: This subsection does not apply to certain security interests (see section 268).
56 Subsection 268(1)
Repeal the subsection, substitute:
Security interests to which vesting rule does not apply
(1) Subsection 267(2) (security interests vested in grantor) does not apply to the following security interests:
(a) a security interest provided for by any of the following transactions, if the interest does not secure the payment or performance of an obligation:
(i) a transfer of an account or chattel paper;
(ii) a PPS lease, if paragraph (e) (serial numbered goods) of the definition of PPS lease in subsection 13(1) applies to the lease, and none of paragraphs (a) to (d) of that definition applies to the lease;
(iii) a commercial consignment;
(b) a security interest covered by subsection (2) of this section.
Example: An example of a security interest mentioned in subparagraph (a)(ii) is a PPS lease of goods that does not secure the payment or performance of an obligation, if:
(a) the goods leased may or must be described by serial number in accordance with the regulations; and
(b) the lease is for a term of between 90 days and 1 year; and
(c) paragraphs (c) and (d) of the definition of PPS lease in subsection 13(1) do not apply to the lease.
57 Subsection 268(3)
Repeal the subsection.
58 Subsection 317(1)
Omit "(when a non - constitutional security interest becomes a constitutional security interest)", substitute "(personal property taken free of security interest when Act starts to operate)".
59 Subsection 327(1)
After "particular time", insert "(the applicable time )".
60 Subsection 327(2)
Omit "(the applicable time )", substitute "(also the applicable time )".
61 Section 338
Omit "this Act" (first occurring), substitute "laws of the Commonwealth".
62 At the end of subsection 339(1)
Add:
; and (c) the charge is a security interest to which this Act applies.
63 Subsection 340(5)
Omit "section", substitute "subsection".
Note: The heading to subsection 340(5) is replaced by the heading " Current assets ".
64 Section 342
Repeal the section, substitute:
This Part provides for the review of the operation of the Act within 3 years after it starts to apply.
The Act starts to apply under Part 9.3 at the registration commencement time (26 months after the Act is given the Royal Assent, or an earlier time determined by the Minister).