The PPSA regime has been operating since 2012, yet credit professionals, insolvency experts and legal practitioners alike are still trying to decide whether it’s a blessing or a curse. If you thought you were an expert by now, we recently shared some interesting points here in our PPSA: Did You Know? Part 1.  Read on for Part 2 of our PPSA and don’t forget to listen to Part 2 of our webinar series with CreditorWatch – PPSR: Getting It Right and Part 3 – PPSR Logic: Create, Manage, Renew.


Many of you will know that a retention of title (or ‘ROT’) clause aims to keep a supplier’s ownership of goods provided unless and until there is full payment for those goods.

What you might not know is that this type of clause goes hand-in-hand with the PPSA because it can create a security interest in two ways: one is a ‘Purchase Money Security Interest’ (“PMSI”) in respect of the particular goods being supplied (remember that a PMSI is a special type of security interest that can give the holder a ‘super priority’ over all other registered security interests).

The second is a general security interest over all goods supplied but not necessarily the specific ones which are properly characterised as a PMSI.

Did you know that suppliers can potentially lodge 2 financing statements on the PPS Register for that reason? That is, one financing statement for a PMSI and a separate financing statement for a general security interest.

This is certainly not done by everyone and it is not the only way to register. It will depend on the wording of your ROT clause and registration costs do need to be considered. But if available, double registration is worthwhile considering to improve your PPSA protection.

Our tip: Check whether you have an ROT clause and how it is worded to allow for double registration.


If your organisation is a credit provider, it is likely that your supply agreements give rise to a PMSI.

When receiving payments or proceeds from customers, there can be uncertainty about the application of those payments to particular obligations (i.e. should the PMSI debt be paid first?). The default position of credit providers that we often see in T&C’s is to apply payments or proceeds “as they see fit.”

The discretionary ability to attribute monies received from customers is important – but did you know that there is a helpful section of the Act outlining the order of application for payments?

Subsection 14(6)(c) of the Act allocates funds to unsecured debt first, secured debt second and PMSI debt last (helping you to best preserve the fullest extent and value of a PMSI debt). Otherwise where no method of application is agreed, the PPSA says that payments must be applied in accordance with the intention of the debtor.

Our tip: First, check whether your organisation is entitled to a PMSI and whether that is accurately reflected in your registrations. Second, know how your credit team is allocating payments. 


If you’re in the credit industry, chances are you’ve had dealings with an Insolvency Practitioner about an unpaid customer debt. Normally, you will flick it to your legal team right?

But did you know that we can help your team get on the front foot with Insolvency Practitioners straight away? Template notification letters, or at least knowing how to respond to a Liquidator in the early stages, can help you hit the ground running in liquidations. You can notify an Insolvency Practitioner of your security interest with something along the lines of:

Our Company has a PMSI (if you do in fact have a PMSI) in the goods sold to the Customer that have not been paid for. This is evidenced by the attached Verification Statement and signed T’s and C’s. Please acknowledge that any of our goods that have not been sold will be stored separately, that you will not disperse any of the proceeds of any sale of those goods and you will provide us with a copy of the debtor’s ledger and the stocktake of goods immediately when they are available.”

If you are hit with an unfair preference payment claim, also remember that there are several defences, one of them being a secured debt.

Our tip: If your registrations are tested by the Insolvency Practitioner, or you are hit with an unfair preference claim, get expert help.

If you just can’t get enough of the PPSA, contact us now on (02) 8488 3389 to make sure you are PPSA protected.