PPSA Contractors Beware Are you signing away your PPSA rights?

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1 PPSA Contractors Beware Are you signing away your PPSA rights? Jacques Nel, Special Counsel PPSA Client Webinar Series 8 December 2016, Brisbane This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 1

2 Introduction Corney & Lind Lawyers Pty Ltd Mid size law firm 18 lawyers + 30 staff Our focus areas Schools & Education Not for Profit & Charity Commercial Employment & Discrimination Personal Injury Commercial & Construction Litigation Migration & Visas Family Law Criminal & Traffic Estate & Elder Law Our lawyers travel to you if needed Specialist lawyers committed to delivering just redemptive outcomes with care and integrity Based right next to the CBD opposite the RBWH transport hub This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 2

3 Overview Security interests in the Construction Industry Registration of your security interests Tips and Traps PPSA Contract Clauses This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 3

4 Recap PPSR Essentials Secured Party Grantor Collateral Security Interest PPS Lease Purchase Money Security Interest This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 4

5 Recap PPSR Essentials Provides equipment on hire over 2 year term $ Provides payment for use of goods This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 5

6 PPSA - Construction Industry Security Interest - Bricks & Mortar Temporary Works Equipment or Goods ordered by Contractors but not installed unfixed plant and material Supplies paid for, but not delivered Goods supplied to site, subject to retention of title until paid in full This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 6

7 PPSA - Construction Industry Security Interest - Bricks & Mortar AS Clause 42.4 Unfixed Plant and Materials If the Contractor claims payment for plant or materials intended for incorporation in the Works but not Incorporated the Principal shall not be obliged to make payment for such plant or materials but the Principal may make payment, if the Contractor establishes to the satisfaction of the Superintendent that (a) such plant or materials have reasonably but not prematurely been delivered to or adjacent to the Site; (b) (c) ownership of such plant and materials will pass to the Principal upon the making of the payment claimed; and such plant or materials are properly stored, labelled the property of the Principal and adequately protected This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 7

8 PPSA - Construction Industry Security Interests Contractual Rights Step in Rights AS Clauses 44.4 and Procedure when the Principal Takes Over Work If the Principal takes work out of the hands of the Contractor under Clause 44.4(a) the Principal shall complete that work and the Principal may without payment of compensation take possession of such of the Constructional Plant and other things on or in the vicinity of the Site as are owned by the Contractor and are reasonably required by the Principal to facilitate completion of the work Adjustment on Completion of the Work Taken Out of the Hands of the Contractor When work taken out of the hands of the Contractor under Clause 44.4(a) is completed the Superintendent shall ascertain the cost incurred by the Principal in completing the work and shall issue a certificate to the Principal and the Contractor certifying the amount of that cost. If the Contractor is indebted to the Principal, the Principal may retain Constructional Plant or other things taken under Clause 44.5 until the debt is satisfied. If after reasonable notice, the Contractor fails to pay the debt, the Principal may sell the Constructional Plant or other things and apply the proceeds to the satisfaction of the debt and the costs of sale. Any excess shall be paid to the Contractor. This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 8

9 PPSA - Construction Industry Security Interests Contractual Rights Retention Money AS Clause 42.3 Retention Moneys The Principal may deduct from moneys otherwise due to the Contractor amounts up to the limit of the percentages, if any, stated in the Annexure of so much of the value of the respective items stated in the Annexure as is included in the calculation of a payment. This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 9

10 Registering your security Interest Register on Time Section 588FL PMSI 15 business days after grantor takes possesion of goods (excludes inventory) Best time to consider PPSA Tender Phase This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 10

11 Tips and Traps PPSA Contract Clauses Typical Contract clauses the Subcontractor will have no rights under sections 95, 118, 121(4), 125, 130, 132, 135, 142 and 143 of the PPSA; This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 11

12 Tips and Traps PPSA Contract Clauses Typical Contract clauses Registration and Verification Statements Subject to clause 46.2, either Party may register any Security Interest granted under the Contract on the PPS Register in any manner it chooses. Either Party shall provide the other Party with any information the other Party requires for the purposes of effecting such registration. For the purposes of section 157(3) of the PPSA, each Party irrevocably and unconditionally waives its right to receive any notice from the other Party in connection with the registration of a Security Interest arising under the Contract This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 12

13 Tips and Traps PPSA Contract Clauses Typical Contract clauses Enforcement The parties agree that for the purposes of section 115 of the PPSA, the following sections of the PPSA will find no application in relation to any relevant Collateral: section 95 (notice by Secured Party of removal of Accession); section 121(4) (notice by Secured Party of enforcement of Security Interest in liquid assets); section 125 (obligation of Secured Party to dispose of or retain Collateral after seizure); section 130, to the extent that it requires the Company to give any notice to the Contractor (notice by Secured Party of disposal of Collateral); section 132(4) (statement of account by Secured Party if it does not dispose of Collateral within prescribed period); section 135 (notice by Secured Party of retention of Collateral); and section 143 (reinstatement of security agreement). This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 13

14 Questions? This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 14

Contact Name: Jacques Nel Position: Special Counsel Email: jacques.nel@corneyandlind.com.au 07 32520011 www.

15 Contact Name: Jacques Nel Position: Special Counsel This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 15

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Alternate streams of income for the modern church (ACC Webinar) Andrew Lind, Director 16 March 2017 This presentation is information only not legal advice Corney & Lind Lawyers Pty Ltd Page 1 Introduction