The Personal Property Securities Act 1999 ("PPSA") and the Personal Property Securities Regulations 2001 came into force on 1 May 2002. There is a six month transitional period (between 1 May and 30 October 2002) during which:
those who have security interests which are registered under the Companies (Registration of Charges) Act 1993, Chattels Transfer Act 1924, Motor Vehicle Securities Act 1989 and Industrial and Provident Societies Amendment Act 1952 will need to protect those interests by registering financing statements; those who will have security interests under the PPSA (ie which had not been thought of as security interests before or which did not require registration eg retention of title arrangements) will also have to register financing statements.The Ministry of Economic Development will be writing to those who already have registered security interests. The letters will tell them what they need to do to reregister their interests.
What Is The Register?The Personal Properties Securities Register was introduced on 1 May 2002. It replaces the existing registers (eg the Companies Office and High Court registries). The register is where people can search, register financing statements, lodge change demands, renew and discharge a financing statement. There is one national register.
Only basic information must be registered. The register is not intended to be a definitive record of the arrangements between parties.
Accessing The RegisterThe register is a fully electronic, real-time database and is available over the Internet at www.ppsr.govt.nz. It is available seven days a week, 24 hours a day. It is not possible to lodge documents physically or search the register physically. Users must have access to a computer and have people trained to use the system.
You may wish to have a business to business connection to the register. Alternatively, you may wish to use an agent or lawyer to register financing statements on your behalf.
If you intend to register your own financing statements, you will need to be a registered user to access the register's database. You will only be able to logon if you have a user ID and password.
Registering A Financing StatementAnyone registering financing statements needs to be aware of what information will be required.
Financing Statement Details When registering the financing statement you must ensure that the statement is accurate. You must keep the information in the financing statement up to date. If you are re-registering a security interest which is currently registered under the old regime, you will need to include more information in the financing statement, such as what enactment it was registered under and when.Debtor DetailsYou must include the following information about a debtor in the financing statement:
the debtor's full legal name as it appears on an official document such as a birth certificate or driver's licence eg. if the legal name is "Kimberly Mary Smith" the name should not be entered as "Kim M Smith"; their date of birth (if an individual) or incorporation number (if a company); their full address; if a debtor is married and uses both the married name and maiden name (for example), then both those names must be entered, as if the debtor were two separate individuals.Collateral Details You will have various fields to choose from when selecting the collateral type to be included in a financing statement. For example: goods - motor vehicles; goods - other; documents of title; intangibles; "all present and after acquired personal property". The computer may prompt you to complete further fields. At this stage the only collateral types that will require you to enter serial numbers are motor vehicles and aircraft. You must describe the collateral unless it is "all present and after acquired personal property". You have to describe the collateral by identification number, if it has one. Identification numbers are permanently marked on or attached to the item by the manufacturer.Secured Party Group DetailsYou must include the following information in the financing statement:
your name and address; your facsimile and e-mail addresses; details of anyone acting on behalf of an organisation (ie a contact person).Verification StatementsOnce you have registered the financing statement you will receive a verification statement by e-mail.
The statement will contain the financing statement PIN and its registration number. You must send a copy of the statement to the debtor within 15 working days of receiving it. However, you may contract out of this requirement in the security agreement.
Amending A Financing StatementYou can amend a financing statement. Most information can be changed but you will need to be careful that the debtor or collateral is not changed so that the date of registration remains correct.
Assigning the obligations of the debtor to someone else will not change the registration date, but the details of the new debtor will need to be entered.
Change Demands A change demand is a change to the financing statement that is entered in the register. A change demand can be requested by the debtor or other interested party (such as someone who has a security interest in the same collateral). As a secured party you will have 15 working days to obtain an injunction or other court order if you object to the change demand. If you do nothing within that time, the register will accept the change demand automatically. Incorrect collateral details may be grounds for a change demand.DischargesA financing statement can be discharged at any time. Once discharged, it cannot be reinstated.
Renewals A financing statement will expire after five years, or earlier if this is provided in the statement. A financing statement can be renewed at any time before its expiry date. A financing statement can be renewed for a maximum of five years.Searching The RegisterAnyone who wants to search the register will need to be a registered user. Searches can be done in a number of ways:
motor vehicle serial number search; debtor person search; debtor organisation search; financing statement registration number search.What Should You Be Doing Now?If you are a secured party, you will need to start thinking about whether you will need a business to business connection to the register and whether you have the technology and personnel to use it.
You will also need to: identify all security interests - have you identified all your security interests which will require registration or re-registration? check all debtor information - do you have all information about the debtor which must be included in a financing statement? check collateral details - have you got sufficient details to enable you to choose the correct collateral type fields and to identify the collateral adequately?© The Lawlink Group Ltd 2001
Every effort has been made to ensure that this information is accurate. However, it is general introductory information only. It does not constitute legal advice and should not be relied on as such. Specialist legal advice should be sought in particular matters. Any reference to law and legislation is to New Zealand law and legislation.
Gayatri Jaduram is a partner in the Auckland Lawlink firm of Hesketh Henry.
Web site:
Hesketh HenryEmail: gayatri.jaduram@heskethhenry.co.nz