Defeating a perfected security interest via the taking free and vesting provisions of the PPSA
27 June 2014
The following feature article appeared in the April-June 2014 issue of the Australian Insolvency Journal.
Can the operation of the taking free and vesting provisions under the PPSA interact to extinguish a perfected security interest in certain circumstances?
In the ordinary course of business, goods can be sold and leased even if they are subject to a registered security interest. In the interests of avoiding disruption to commerce, and in recognition that a third party purchaser or lessee should not have to check the Personal Property Securities Register (PPSR) before each and every transaction, the Personal Property Securities Act 2009 (Cth) (PPSA) allows a third party to take an interest in goods free of an existing security interest in certain circumstances.
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