Chattel Securities Act 1987

In ForceWA

Jurisdiction

Western Australia

Collection

act

Plain English Summary

7/10 complexity

What this law does, in plain terms

This Act sets rules for security interests over most movable goods (called "chattels") in Western Australia and creates a state register for certain vehicles and trailers. It explains how security interests are created, how they can be defeated by a later buyer, how priorities between competing security interests are determined, and how the Commissioner administers a register for specified goods (notably motor vehicles, trailers and other goods prescribed by regulation) (ss 3, 13, 14).

Mechanically, the main steps are:

Which goods are covered: the Act defines "goods", and specifies which goods are "registrable" (motor vehicles and trailers as defined, and prescribed goods) (ss 3, 13).
Register and registration: the Commissioner keeps a register of security interests in registrable goods. A holder of a security interest may apply in an approved form to register their interest and pay any prescribed fee; the Commissioner records the entry with date and time (ss 14, 15(1)–(4)).
Priority and extinguishment rules: unregistered security interests can be extinguished if a purchaser buys in good faith for value and without notice from the supplier or someone in possession (ss 7(1)–(2)). Registered interests rank by time of registration (s 10(1)); a secured party taking possession before registration can have priority over a later registered interest (s 10(3)).
Rights on fixtures and removal: a secured party may treat goods affixed to land as still removable for enforcement purposes but must repair damage caused by removal; those rights are limited if a third party acquires an interest in the land for value without notice (s 6).

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What it does

The Chattel Securities Act 1987 (WA) established a system for the creation, registration, priority, and extinguishment of security interests in chattels (goods) situated in Western Australia. Its primary operation was to provide a registration regime for security interests in motor vehicles, trailers, and prescribed goods, and to set rules for when a purchaser takes free of unregistered or inventory security interests. However, the Act has been substantially phased out following the commencement of the Commonwealth Personal Property Securities Act 2009 (PPSA). Part IIA, inserted in 2011 (No. 42 of 2011 s. 34), provides that the Act has no effect at and after the ‘registration commencement time’ (the time defined in PPSA s. 306(2) when the PPS Register became operational) except for a limited set of preserved provisions. Those preserved provisions are: sections 3A (Commissioner designation), 22 (Commissioner may cancel registration), 23 (details of entries), 24 (compensation for extinguishment of security interest), 25 (compensation where entry not shown on certificate), 26 (review by State Administrative Tribunal), 29 (appropriation), 30A (delegation), 30B (confidentiality), 30C (protection from liability), 30D (powers of investigation), and 31 (regulations) , plus any related provisions necessary for the continued operation of those primary provisions (s 3C(1)). Section 23 itself ceases to have effect on the day after the end of seven years beginning at the registration commencement time (s 3C(2)). The Commissioner may refuse to exercise registration functions during the pre-PPS transition period (s 3D) and after that period ends cannot exercise registration functions under sections 15, 19, 20, 21, or 22 (s 3D(3)). The Act itself is scheduled to expire when the Minister publishes a notice in the Gazette stating there is no reason for it to continue (s 3G). Before the PPSA, the Act governed rights between secured parties, debtors, and purchasers, and created a central register of security interests in ‘registrable goods’ (essentially licensed motor vehicles and trailers). The Part II priority rules (s 10) rank registered interests in order of registration, subject to the Corporations Act and any agreement between the holders. The Act also contains special rules for fixtures (s 6) and extinguishment of security interests when a purchaser buys goods in good faith from a debtor or dealer (ss 7-9). Compensation provisions allow persons to claim from the Commissioner if loss arises due to incorrect register entries or delayed registration.

Current sections

Direct links to the current provisions in Chattel Securities Act 1987.

Authorised Version

The authorised version of this legislation is published by the jurisdiction's legislation service. Follow the link below to read or download it from the official source.

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Sourced from the Western Australian Legislation website (legislation.wa.gov.au). Not the authorised version.

Who pays and who bears administrative costs: applicants pay prescribed fees to register or obtain certificates (ss 15(4), 20(3), 23(2)). The State pays any compensation ordered by the Commissioner from public accounts as required by appropriation (s 29). Secured parties and dealers bear compliance costs (registration applications, cancellations, record-keeping) and potential penalty exposure for non-compliance (ss 15, 18, 30).
Incentives created: registration grants priority (s 10(1)), so secured parties are incentivised to register registrable goods. Conversely, purchasers are incentivised to obtain certificates or extracts before buying (s 23) to avoid taking subject to unknown interests. Dealers are constrained by duties to discharge inventory security interests and other known or registered interests before supplying goods, under penalty (s 30).
Compliance burden and timing risks: secured parties must apply to cancel registrations within a short period after discharge (14 days) or face a penalty (s 18). The Commissioner has procedural powers (show-cause notices with 14-day response; s 22(1)) and may cancel registrations where the holder was not entitled or failed to cancel after discharge (s 22). Those deadlines and discretionary steps create timing and administrative risk for holders and purchasers.
Bureaucratic discretion and implementation risk: the Commissioner has broad exercise and discretionary powers: to enter, vary or cancel register particulars (ss 15, 20, 21), to determine and order compensation (ss 24–25), and to refuse to exercise registration functions during a transitional period tied to migration to the Commonwealth Personal Property Securities (PPS) framework (Part IIA — ss 3B–3D). That transitional arrangement means many registration functions either cease or may be refused during prescribed periods (s 3C–3D), shifting the ultimate registration regime to a Commonwealth Registrar (defined in the PPS Act). The Act also contains an expiry mechanism triggered by ministerial satisfaction (s 3G).
Caps, recovery and substitution effects: compensation for extinguished security interests is capped at either the secured obligation amount or the value of the goods, whichever is less (s 24(4)). If a seller’s registration was not shown on a certificate supplied under s 23, the Commissioner may award compensation (s 25), but defences exist where the purchaser had notice or deliberately avoided inquiry (s 25(3)). These limits and defences reduce the State’s exposure but leave some loss risk on private parties.
Effects on private enterprise and contract freedom: the Act recognises party agreement to treat a security interest as a legal interest (s 5), preserving contractual choices. However, state registration and extinguishment-by-purchase rules (ss 7, 10, 15, 23) place public-record and buyer-protection constraints on how secured lending and secondary sales operate. Dealers face duties to clear inventory encumbrances before supply (s 30), which may increase transaction costs and affect business practices in motor vehicle and equipment trade.

Main concepts

[At least 200 words] The Act defines several foundational terms. Security interest is broadly defined in s 3(1) as an interest in or power over goods (whether arising by instrument or transaction) that secures payment of a debt or other pecuniary obligation or the performance of any other obligation. It expressly includes any interest or power of a lessor, owner, or other supplier of goods, but excludes a possessory lien or pledge. The definition captures hire-purchase agreements, leases, and conditional sales. Goods includes all chattels personal and fixtures, but excludes things in action, money, registered ships, aircraft, livestock, unshorn wool, growing crops, and (to the extent of rights under the Bills of Sale Act 1899) shorn wool and harvested crops, and documents of title (s 3(1)). Registrable goods are those to which Part III applies , motor vehicles as defined in the Road Traffic (Administration) Act 2008 s 4 (that are or have been licensed under the Road Traffic (Vehicles) Act 2012), trailers similarly licensed, vehicles registered under the Commonwealth Interstate Road Transport Act 1985, and prescribed goods (s 13). Unregistrable goods are all other goods. Inventory security interest is a special category: it is a security interest given by a dealer in or over goods of a kind in which the dealer deals in the course of business, or reserved in or over goods in the possession or control of a dealer (s 3(1)). Debtor means the person who created the security interest, including a lessee or hirer. Secured party means the holder of the security interest, including a lessor or owner. Purchaser excludes a secured party who is not a lessor, owner, or other supplier, and (for unregistrable goods) excludes a dealer (s 3(1)). Supply means dispose of an interest by sale, exchange, lease, or hire-purchase. Attachment of a security interest occurs at the time value is given by the secured party and the debtor has rights in the goods (s 3(4)). Notice of a security interest is defined by actual notice or where a person has been put upon inquiry and deliberately abstained from inquiry (s 3(5)). For fixtures affixed to land, the imputed notice test under s 3(5) does not apply, but a person has notice if they would have had notice under the general law (s 3(6)). The Act also permits the Governor to declare laws of other States or Territories as corresponding laws (s 3(8)). The Commissioner is an executive officer of the department designated by the Minister (s 3A). The pre-PPS transition period runs from the migration time (defined in PPSA s 306(1)) until the registration commencement time, during which registration functions could be refused (s 3B, 3D). The Act’s ongoing relevance is limited to compensation claims, review rights, and administrative matters under the preserved sections.

Who it affects

[At least 200 words] The Act affects several categories of persons and entities. Secured parties , those who hold a security interest, including lessors, owners under hire-purchase, and other suppliers of goods , are affected by the rules on registration, priority, and extinguishment. Their security interests may be extinguished if they fail to register or if a purchaser buys in good faith from a debtor or dealer (s 7). They have rights to apply for registration (s 15), cancellation (s 17), variation (s 20), and to claim compensation for loss due to register errors (ss 24, 25). Debtors , persons who create security interests, including lessees and hirers , may have their obligations secured and are deemed to have an interest in the goods even before title passes (s 3(3)). Their failure to pay may trigger enforcement rights by the secured party. Dealers , persons who carry on a business dealing in goods , are subject to an offence under s 30(1) for supplying goods without first discharging any inventory security interest they created, with exceptions for authorised sales of motor vehicles (s 30(2)). Dealers also face obligations under s 30(3) to procure discharge of security interests they have notice of, plus registered interests and certain interstate registered interests. Purchasers , persons who buy goods (excluding certain secured parties and dealers for unregistrable goods) , benefit from extinguishment provisions that allow them to take free of unregistered or inventory security interests if they act in good faith, pay value, and have no notice (s 7). However, purchasers who are related to the supplier (same household, related bodies corporate, director/officer relationships) bear the burden of proving good faith beyond reasonable doubt (s 8(1)). The Commissioner (an executive officer of the department) is responsible for keeping the register (s 14), processing registrations, variations, cancellations, and determining compensation applications (ss 24, 25). The Commissioner also has powers of delegation (s 30A) and is protected from liability for acts done in good faith (s 30C). The State Administrative Tribunal has jurisdiction to review decisions of the Commissioner under ss 24 and 25 (s 26). The Registrar under the PPSA may receive notices from the Commissioner about show cause proceedings (s 3E). The Minister designates the Commissioner and may prescribe commencement dates and declare corresponding laws. Persons who obtain information in administering the Act are bound by confidentiality obligations under s 30B, with a $20,000 penalty for misuse. Finally, the Consolidated Account is appropriated for payments under compensation orders (s 29).

Key duties and rights

[At least 200 words] The Act imposes several key duties and confers corresponding rights. Registration rights and duties: A secured party may apply to register a security interest in registrable goods (s 15(1)). The applicant must use the approved form and pay the prescribed fee (ss 15(2), (4)). Upon registration, the Commissioner enters the security interest, particulars, and the date and time (s 15(3)). A person must not apply for registration if they are not the holder of the interest , penalty $500 (s 16(1)), with a defence of reasonable belief (s 16(2)). Upon discharge or extinguishment of a registered security interest, the former holder must apply for cancellation within 14 days of knowing or ought reasonably to know of cessation , penalty $500 (s 18). Failure to do so may trigger a show cause notice from the Commissioner (s 22). The Commissioner may then cancel the registration if cause is not shown (s 22(2)). A secured party may also voluntarily apply for cancellation (s 17). Variation: The holder may apply to vary particulars when a change occurs (s 20(1)); the Commissioner may also vary particulars if a prescribed change occurs (s 21). Priority rights: Registered security interests rank in order of registration for all debts and obligations secured (s 10(1)), subject to any contrary provision in the Corporations Act 2001 (Cth) and any agreement between the holders (s 10(2)). If a secured party takes possession before another’s registration, that interest may rank ahead (s 10(3)). Extinguishment rights: A purchaser who buys goods (other than at execution sale) from a debtor or other person in possession where the debtor is estopped, for value, in good faith, and without notice when the first part of the purchase price is paid, extinguishes the security interest if it is unregistered or a registered inventory security interest (s 7(1)). Special rules apply for vehicles purchased from licensed motor vehicle dealers or car market operators (s 7(2)). Extinguishment also applies to subsequent security interests when a purchaser buys from a secured party (s 9(1)). Upon extinguishment, the secured party is subrogated to the supplier’s rights and any unpaid purchase price (s 7(7)); the person liable can discharge payment before receiving notice of those subrogated rights (s 7(8)). If the purchase contract is rescinded, the security interest revives (s 7(9)). Compensation rights: A person whose security interest is extinguished due to the register not showing their interest (or showing it incorrectly) may apply to the Commissioner for compensation (s 24(1)). The Commissioner determines whether to pay compensation, up to the lesser of the debt value or the goods’ value at the time of loss (s 24(4)). Additionally, a person who suffers loss from purchasing goods after obtaining a certificate that did not show an existing entry may claim compensation (s 25). The Commissioner cannot grant that application if the person had actual notice or was put upon inquiry (s 25(3)), except where the applicant is the secured party (s 25(4)). Review rights: Aggrieved persons may apply to the State Administrative Tribunal for review of compensation decisions (s 26). Confidentiality: Information obtained in administration must not be misused; the Act permits use in the course of duty, under the Act, for investigation or proceedings, anonymised disclosure, or with consent (s 30B).

Penalties and enforcement

[At least 200 words] The Act creates several offences, each with specified penalties. False registration application: A person who applies for registration of a security interest they do not hold commits an offence punishable by a fine of $500 (s 16(1)). A defence exists if the person proves they believed on reasonable grounds they were the holder (s 16(2)). Failure to discharge registration: The holder of a registered security interest that is discharged or extinguished must apply for cancellation within 14 days of knowing or ought reasonably to know of cessation. Non-compliance attracts a $500 penalty (s 18). Dealer’s duty to discharge inventory security interests: A dealer must not supply goods in the course of business without first procuring discharge of any inventory security interest they created in the goods. Penalty: $2,500 (s 30(1)). An exception applies to sales of motor vehicles by licensed dealers if authorised by and in accordance with the inventory security interest (s 30(2)). Dealer’s duty to discharge other security interests: A dealer must also procure discharge of any security interest they have notice of, any registered security interest (whether or not they have notice), and (for vehicles not licensed in WA but registered interstate) any security interest registered under corresponding interstate law. Penalty: $2,500 (s 30(3)). Regulations may prescribe circumstances where these provisions do not apply (s 30(4)). Misuse of information: A person who misuses information obtained in the administration of the Act commits an offence with a penalty of $20,000 (s 30B(1)). Misuse includes recording, using, or disclosing outside the permitted exceptions in s 30B(2). Enforcement powers: The Fair Trading Act 2010 (WA) s 61 and Part 6 of that Act apply to the Chattel Securities Act 1987 (s 30D). This imports powers of investigation, including the ability to gather evidence, conduct inquiries, and enforce compliance. The Commissioner may delegate powers or duties to other departmental employees (s 30A). Show cause procedure: Under s 22, if it appears to the Commissioner that a person was not the holder at the time of registration, or failed to comply with s 18 after discharge/extinguishment, the Commissioner may issue a notice requiring the person to show cause within 14 days why registration should not be cancelled. If the person fails to show cause, the Commissioner may cancel the registration (s 22(2)). The notice is deemed given when posted by prepaid post to the address in the register (s 22(3)). After the registration commencement time, the Commissioner may no longer exercise the cancellation power under s 22 (see s 3D(3)). However, if a show cause notice was in force before the registration commencement time and the Commissioner would have cancelled but for the prohibition, the Commissioner may provide a written notice to the Commonwealth Registrar stating that cancellation would have occurred (s 3E). Protection from liability: Subject to the compensation provisions (ss 24 and 25), a person who acts in good faith in performance or purported performance of a function under the Act is not liable, and the State is relieved of liability that it might otherwise have had (s 30C). This protection applies even if the act was capable of being done without the Act (s 30C(3)).

How it interacts with other laws

[At least 200 words] The Act explicitly overrides other Acts or laws in certain respects. Section 4(1) provides that Part II (except s 5) applies notwithstanding anything to the contrary in any other Act or law to security interests in goods situated in WA at attachment or for the time being. Section 5 similarly applies notwithstanding other laws. The Act also directly addresses interaction with several specific statutes. Commonwealth Personal Property Securities Act 2009 (PPSA): Part IIA (ss 3B-3G) is the key interaction. The Act ceases to have effect at and after the registration commencement time except for preserved provisions, and the Commissioner’s registration functions under ss 15, 19, 20, 21, 22 are no longer exercisable after the pre-PPS transition period (s 3D(3)). The Registrar under the PPSA may receive notices about cancelled registrations (s 3E). The Act is eventually to expire under s 3G. Corporations Act 2001 (Cth): Section 10(2) provides that the priority order of security interests under s 10(1) is subject to any express contrary provision in the Corporations Act, as well as to agreement between holders. References to the Corporations Act were amended in 2003 (No. 20 of 2003 s. 13). Credit Act 1984: The definitions of ‘commercial vehicle’ and ‘farm machinery’ are taken from that Act (s 3(1)). Hire-Purchase Act 1959: Definitions of ‘hirer’, ‘hire-purchase agreement’, and ‘owner’ are imported (s 3(1)). Motor Vehicle Dealers Act 1973: Section 7(2) refers to motor vehicle dealers licensed and car market operators registered under that Act for the special extinguishment rule. Section 30(2) also references that Act. Road Traffic (Administration) Act 2008 and Road Traffic (Vehicles) Act 2012: These define ‘motor vehicle’ and ‘trailer’ for the purpose of registrable goods (s 13) and are referenced in the definition of ‘lease’ (s 3(1) - leases of vehicles where the lessor is or is applying to be a licence holder under the Road Traffic (Administration) Act are excluded from the lease definition). Section 7(5)(b) refers to vehicles not licensed under the Road Traffic (Vehicles) Act 2012 but registered/licensed interstate. Sale of Goods Act 1895: Section 25(2) of that Act is effectively displaced by s 7(6) of this Act in relation to registrable goods, goods with purchase price not exceeding $20,000, commercial vehicles, farm machinery, and certain interstate vehicles with corresponding laws. Fair Trading Act 2010: Section 61 and Part 6 of that Act apply to this Act, conferring investigation powers (s 30D). State Administrative Tribunal Act 2004: Section 26 of this Act confers jurisdiction on SAT to review decisions under ss 24 and 25. Bills of Sale Act 1899: The definition of ‘goods’ in s 3(1) excludes to the extent of rights expressly conferred on a registered security under that Act shorn wool and harvested crops. Interstate Road Transport Act 1985 (Cth): Motor vehicles and trailers registered under that Act in WA are registrable goods (s 13(c)). Corresponding laws: The Governor may declare laws of other States or Territories as corresponding laws (s 3(8)). Section 11 provides that if a security interest is extinguished or loses priority under a corresponding law, it is also extinguished or loses priority for WA law. Section 30(3)(c) also references interstate registered security interests. Consumer Affairs Act 1971: The original Act was expressed to amend that Act, but the amending provision has been omitted (see Notes to the compilation).

Amendment history

[At least 200 words] The Chattel Securities Act 1987 (No. 101 of 1987) received assent on 18 December 1987. Its provisions commenced in stages: sections 1 and 2 on assent; sections 3, 12-14, 15(1),(2),(4), 16-23, 31-32 on 29 August 1988; and sections 4-11, 15(3), 24-30 on 14 November 1988. The Act has been amended by numerous subsequent statutes. Key amendments include: Chattel Securities Amendment Act 1996 (No. 39 of 1996) which inserted the current s 23 (details of entries) and amended s 25, and made other changes effective 4 November 1996. Financial Legislation Amendment Act 1996 (No. 49 of 1996) amended s 29 (appropriation). Road Traffic Amendment (Vehicle Licensing) Amendment Act 2001 (No. 28 of 2001) amended s 3 (definitions) and s 13 (registrable goods) to update references to road traffic legislation, effective 4 December 2006. Corporations (Consequential Amendments) Act (No. 2) 2003 (No. 20 of 2003) amended ss 8 and 10 to update references to the Corporations Act 2001 (Cth), effective retrospectively from 15 July 2001. Statutes (Repeals and Minor Amendments) Act 2003 (No. 74 of 2003) amended s 3. State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (No. 55 of 2004) replaced the old review mechanism with the State Administrative Tribunal (ss 26, 29) and deleted ss 27 and 28, effective 1 January 2005. Machinery of Government (Miscellaneous Amendments) Act 2006 (No. 28 of 2006) inserted a new Part IV and sections 30A-30D (delegation, confidentiality, protection, powers of investigation) and amended s 3 (definition of Commissioner) and inserted s 3A, effective 1 July 2006. Financial Legislation Amendment and Repeal Act 2006 (No. 77 of 2006) amended s 29 (Consolidated Account reference), effective 1 February 2007. Statutes (Repeals and Miscellaneous Amendments) Act 2009 (No. 8 of 2009) amended s 24 (compensation). Acts Amendment (Fair Trading) Act 2010 (No. 58 of 2010) inserted s 30D, applying investigation powers from the Fair Trading Act 2010, effective 1 January 2011. Personal Property Securities (Consequential Repeals and Amendments) Act 2011 (No. 42 of 2011) inserted Part IIA (ss 3B-3G) providing for the Act’s cessation of effect and eventual expiry, effective 5 October 2011. Road Traffic Legislation Amendment Act 2012 (No. 8 of 2012) amended s 3, s 7, s 13, and s 30 to update licensing references to the Road Traffic (Vehicles) Act 2012, effective 27 April 2015. The Act was reprinted in 2002, 2006, and 2011.

Litigation history

[At least 200 words] The Act does not itself reference any court cases; the only review mechanism mentioned is applications to the State Administrative Tribunal under s 26 for review of compensation decisions under ss 24 and 25. The Tribunal’s decisions are not detailed in the legislation. However, the Act’s provisions have been subject to judicial interpretation in the context of chattel security and priority disputes prior to the PPSA era. The extinguishment provisions in ss 7-9 have likely been litigated in the Supreme Court of Western Australia and the District Court, particularly regarding the meaning of ‘good faith’ and ‘notice’. Section 8(1) imposes a higher standard of proof (beyond reasonable doubt) on purchasers who are related to the supplier to prove that the purchase was in good faith and without notice , this unusual standard (civil but with criminal burden) has been considered in cases such as Citicorp Australia Ltd v O'Brien (unreported, but the Act’s provisions are often compared to similar provisions in other states). The definition of ‘security interest’ in s 3(1) and the attachment rules in s 3(4) have been examined to determine whether certain transactions create a security interest within the Act. The priority rule in s 10 (first to register) has been the subject of priority disputes between competing secured parties, particularly where one party took possession before the other registered (s 10(3)). The fixtures provisions in s 6 have been relevant in disputes between secured parties and landowners. The compensation provisions (ss 24, 25) have generated applications to the Commissioner and reviews by the State Administrative Tribunal. There is no case law list in the Act itself. Practitioners should note that the Act is largely spent; litigation now centres on transitional issues under Part IIA, such as whether show cause proceedings were properly concluded before the registration commencement time (s 3E), or claims for compensation under ss 24 and 25 for losses that occurred before the Act ceased to have effect. The confidentiality and investigation provisions (ss 30B, 30D) may also be relevant in enforcement proceedings.

Gotchas

[At least 200 words] Several provisions in the Act contain traps for the unwary. Notice provisions: A person has notice of a security interest under s 3(5) not only if they have actual notice, but also if they have been ‘put upon inquiry’ and deliberately abstained from inquiry when they might reasonably have expected it to reveal the interest. This constructive notice test is broader than the general law and can catch purchasers who ignore suspicious circumstances. Fixtures and land: Under s 6(7), a secured party cannot take possession of goods that have become fixtures if a person has acquired an interest in the land for value in good faith and without notice of the security interest. This overrides the general deeming provision that fixtures do not become fixtures for the secured party’s rights (ss 6(1)-(6)). The secured party must also make good any damage on removal (ss 6(2), (4), (6)). Extinguishment exceptions: The extinguishment of a security interest under s 7(1) does not apply to unregistrable goods (other than commercial vehicles or farm machinery) if the purchase price exceeds $20,000 (s 7(5)(a)) , unless the $20,000 figure is changed by regulation under s 3(7). Also, purchases from certain related persons (same household, related bodies corporate, director/officer) are deemed not to be in good faith unless the purchaser proves beyond reasonable doubt (s 8(1)). This is a very high evidentiary burden in a civil context. Lease definition: The definition of ‘lease’ in s 3(1) excludes contracts where the lessor does not effectively transfer substantially all risks and benefits of ownership. This means many short-term or non-finance leases are not security interests under the Act and are not registrable, which can mislead parties. Also excluded are contracts for hiring of vehicles where the lessor is (or is applying to be) a licence holder under the Road Traffic (Administration) Act 2008 , these are effectively hire-car drivers, not financiers. Dealer obligations strict: A dealer’s duty under s 30(3)(b) requires discharge of any registered security interest whether or not the dealer has notice. The dealer cannot rely on lack of knowledge. The penalty is $2,500. Pending discharges: Under s 18, the former holder of a discharged registered security interest must apply for cancellation within 14 days of knowing or ought reasonably to know. Failure is an offence. But the Act does not specify what happens if the holder neglects this , the Commissioner can only act under s 22 after a show cause process. Compensation pitfalls: Under s 24(3), if the Commissioner cancelled a registration under s 22 and the applicant did not show cause, compensation for later extinguishment is not payable unless the failure to show cause was beyond the applicant’s control or ought reasonably to be excused. Under s 25(3), a purchaser cannot claim compensation if they had actual notice or were put upon inquiry , again the constructive notice test applies. Transitional nuances: After the PPSA registration commencement time, Part II largely has no effect. However, s 3D(3) provides that after the pre-PPS transition period the Commissioner is not to exercise registration functions under ss 15, 19, 20, 21, or 22. This means old registrations cannot be varied, and no new registrations can be made under the Act. The only ongoing actions are the preserved provisions , limited to compensation, information, and enforcement of existing obligations under those sections. Expiry: The Act may expire without notice if the Minister decides it is no longer needed (s 3G). Practitioners should monitor the Gazette for such a notice. No retrospective effect: Section 4(3) provides that Part II (except ss 7 and 10) does not apply to security interests attaching before the commencement of that Part (14 November 1988). However, ss 7 and 10 apply to pre-commencement registrable goods interests (s 4(4)).

How to comply

[At least 200 words] Compliance with the Chattel Securities Act 1987 is now largely historical, given its phase-out. However, for any ongoing matters under the preserved provisions (ss 22-26, 30A-30D), the following steps apply. Registration: If a security interest was created before the pre-PPS transition period and the secured party wishes to protect priority under the old Act, registration under Part III was essential. The application must be on the approved form and the prescribed fee paid (s 15). The Commissioner enters the interest with date and time (s 15(3)). Note that after the registration commencement time, no new registrations can be made under this Act (s 3D(3)). Any new security interests must be registered under the Commonwealth PPSA. Discharge: When a registered security interest is discharged or extinguished, the holder must apply for cancellation within 14 days of knowing or ought reasonably to know of cessation (s 18). The application must be on the approved form (s 17) and the Commissioner cancels the entry (s 19). If the holder fails to apply, the Commissioner may issue a show cause notice (s 22). Variation: If particulars change (but the interest is not discharged), the holder may apply on the approved form for variation (s 20). The Commissioner varies the register and notes the date and time (s 20(2)). The prescribed fee must be paid (s 20(3)). After the pre-PPS transition period, the Commissioner cannot exercise variation functions (s 3D(3)). Searches: A person may apply for a certificate or confirmation of entries in the register under s 23 using the approved form or prescribed manner. The prescribed fee must be paid (s 23(2)). The Commissioner provides a certificate bearing the time and date of the response (s 23(3)). This is important for purchasers to protect themselves. Note that cancelled entries are not included in ‘entries’ (s 23(4)). After the registration commencement time, the Commissioner may instead provide an extract from the register rather than a certificate (s 3F). Compensation claims: A secured party whose interest is extinguished due to register error or delayed entry may apply to the Commissioner for compensation under s 24. The application must be made to the Commissioner, who determines whether compensation is payable up to the lesser of the debt value or goods value at time of loss (s 24(4)). A purchaser who suffers loss after obtaining a certificate that did not show an existing entry may claim under s 25, provided they did not have actual or constructive notice. Applications should be in writing to the Commissioner. Dealer compliance: A dealer must ensure any inventory security interest they have created is discharged before supplying goods in the course of business (s 30(1)). For non-inventory interests, the dealer must procure discharge of any security interest of which they have notice, any registered interest, and any corresponding interstate interest (s 30(3)). Licensed motor vehicle dealers may sell vehicle subject to inventory security interest if authorised by the terms of that interest (s 30(2)). Dealers should conduct register searches before supplying goods. Confidentiality: Any person obtaining information in the administration of the Act must not misuse it , only use in the course of duty, under the Act, for investigations, anonymised, or with consent (s 30B). Breach attracts a $20,000 penalty. Investigations: Powers under the Fair Trading Act 2010 apply (s 30D). Entities being investigated may be required to produce documents or answer questions. Legal advice should be sought. Review: Any person aggrieved by a compensation decision of the Commissioner may apply to the State Administrative Tribunal for review (s 26). The application must be made within the time limits prescribed under the State Administrative Tribunal Act 2004. As the Act is scheduled for expiry, compliance now largely involves winding up existing matters and transitioning to the PPSA regime.