As accredited specialists in Business Law, Leigh Adams Commercial Lawyers is able to clarify for their clients how this far-reaching piece of legislation impacts on their commercial transactions and their business endeavours.

Buying or selling a business or shares

If you are buying or selling a business or company shares or units in a unit trust, or a debt or any other right to sue, then you need a lawyer who understands the Personal Property Securities Act. The Act, in simple terms, legislates what we have all known for a very long time: that possession is more important than ownership. It turns our English-bred understanding of ownership and title on its head. It is counter-intuitive. In its short life (it started in Australia on 30 January 2012) it has caused numerous businesses to go broke for a variety of reasons including, for example, where inventories have been lost to customers’ liquidators, scaffolding (leased from third party suppliers) on building sites has vested in the liquidator of the broke builder, amongst many other examples.


If you are in the business of providing invoice financing facilities (factoring), we can ensure you rank ahead of other financiers who have a prior ranking general security agreement – whether or not your invoice financing is by way of full ledger funding with or without segregated accounts. We can also ensure you rank ahead of other financiers if you have spot-ledger funding – again whether or not you have segregated or non-segregated accounts.

Subordination and Priority Arrangements

We can negotiate arrangements with your biggest customer whom you suspect is having financial difficulties so that in the event they go into liquidation, your chances of having to refund your hard-earned income to the liquidator because of the law of preferences (s 588FA Corporations Act) is minimised. We are well-versed in drafting deeds of subordination and deeds of priority in this regard, and we can put together appropriate security documents so that your position is as secure as possible, ranking ahead of other secured parties including banks.

Lending Money

The Personal Property Securities Act does not just affect factoring. It impacts upon any lender. If you are lending money to your son or daughter to help fund their first business, then we can make sure that your funds will be protected so in the event of failure, you will get your money back ahead of anyone else.

Arms Length Funding

Likewise when acting for a funder of a business venture at arm’s length, we ensure our funding and security documents fully comply with all relevant laws, and we can ensure that you will have a priority ranking above others who are also seeking to be repaid.

Terms and Conditions of Sale or Lease

The laws also affect terms and conditions of sale and terms and conditions of equipment leasing. We are frequently called upon to upgrade our clients’ terms and conditions (including on-line terms and conditions) to meet the requirements of the Personal Property Securities Act. We identify the security interest and the collateral and adopt an approach by which the end purpose is achieved at minimal cost to our client. We do this by focusing only on the clauses which need to be added to or inserted or amended. We avoid total re-writes where possible. This keeps legal costs down and our clients happy.

Retention of Title Clauses

Many businesses are unaware that retention of title clauses (“ROT” clauses or “Romalpa” clauses) have been rendered useless as a result of the Personal Property Securities Act, unless the Act is complied with and the resulting “security interest” is perfected. We can ensure that your ROT clause works as well as it used to with our cutting-edge documents which take into account all relevant recent case law.

Your key customer might go bust.

What can you do? We have inventive ways of securing your position so that the claw back provisions of the Corporations Act do not apply.

Call Leigh Adams Commercial Lawyers today for more information on 02 9964 0022 or email to ensure you have the documents you need to protect you, your business and your family.

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