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Ensure your documentation under the Personal Property Securities Act [PPSA] is in order to protect your assets against a Liquidator. The Victorian Supreme Court recently held that a Retention of Title Clause on a Tax Invoice is sometimes not sufficient to protect a claim against a Liquidator.
In the case of Central Cleaning Supplies (Aust) Pty Ltd v Elkerton  VSC 61,the Court examined a claim brought by a supplier of cleaning equipment named Central Cleaning Supplies. Central Cleaning Supplies sold equipment to Swan Cleaning on an ongoing basis before Swan went into liquidation in May 2013 when Elkerton and another liquidator were appointed to Swan.
Central Cleaning Supplies had a general Credit Agreement which it had entered into with Swan in September 2009 before 30 January 2012. That credit agreement did not contain a Retention of Title clause.
Central Cleaning Supplies did, however insert a Retention of Title Clause on their Tax Invoices which they issued to Swan Cleaning before and after 30 January 2012 in respect of each order from Swan.
The Liquidator of Swan Cleaning asserted that Central Cleaning Supplies did not have the right to claim retention of title over cleaning equipment delivered to Swan Cleaning after 30 January 2012 on the basis that:
Central asserted that their interests in the cleaning equipment delivered after 30 January 2012 were protected under the “transitional” provisions in the PPSA. The Court held that in order to make this claim Central would have needed to register their interests on the PPSR, as there was no entitlement by Central to rely on the Credit Agreement as that Agreement did not contain any reference to a Retention of Title claim by Central and as such was not a general security agreement protected under the transition provisions.
The lesson for new players in this case, is to ensure that the documentation on which you rely to assert your claim to personal property is properly identified. Further, it is critical that any security agreement on which you have relied is also registered to “perfect” its purpose against others who may claim the same interest. The trick is to remember this is a “two-step” process involving a written security agreement and the registration on the PPSR.