Div 2contains the Dictionary. The Dictionary is a list of every term defined in this Act. A term will either be defined in the Dictionary itself, or in another provision of this Act. If another provision defines the term, the Dictionary will have a signpost to that definition.

Division 2 contains the Dictionary. The Dictionary is a list of every term defined in this Act. A term will either be defined in the Dictionary itself, or in another provision of this Act. If another provision defines the term, the Dictionary will have a signpost to that definition. A security interest is an interest in personal property provided for by a transaction that secures payment or the performance of an obligation. The form of the transaction and the identity of the person who has title to the property do not affect whether an interest is a security interest. Certain transactions that do not secure payment or the performance of an obligation may also give rise to a security interest: transfers of accounts, consignments and certain long‑term leases and bailments (called PPS leases). > ABN (short for Australian Business Number) has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999. > accession to other goods means goods that are installed in, or affixed to, the other goods, unless both the accession and the other goods are required or permitted by the regulations to be described by serial number. > account means a monetary obligation (whether or not earned by performance, and, if payable in Australia, whether or not the person who owes the money is located in Australia) that arises from: (b) granting a right, or providing services, in the ordinary course of a business of granting rights or providing services of that kind (whether or not the account debtor is the person to whom the right is granted or the services are provided); > ADI account means an account, within the ordinary meaning of that term, kept by a person (whether alone or jointly with one or more other persons) with an ADI that is payable on demand or at some time in the future (as agreed between the ADI and the person or persons). (b) includes any liability of a debtor to pay interest, credit costs and other charges or costs payable by the debtor in connection with the advance or the enforcement of a security interest securing the advance. (d) a public authority or an agency or instrumentality of the Crown in right of the Commonwealth, a State or a Territory. > Note: Other parts of speech and grammatical forms of “bankruptcy” (for example, “bankrupt”) have a corresponding meaning (see section 18A of the Acts Interpretation Act 1901). (d) a day on which the Registrar has refused access to the register, or otherwise suspended the operation of the register, in whole or in part (see subsection 147(5)); or > carrying on an enterprise has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999. (a) a security interest in, or lease of, specific goods, or specific goods and accessions to the specific goods (even if the description of the goods (and accessions) is taken to include a description of intellectual property, or an intellectual property licence, under section 105); (b) in relation to a registration with respect to a security interest—includes personal property described by the registration (whether or not a security interest is attached to the property). Note: Section 161 authorises the registration of a financing statement that describes personal property before or after a security agreement is made covering the property, or a security interest has attached to the property. (e) a consignee for sale, lease or other disposal if the consignee is generally known to the creditors of the consignee to be selling or leasing goods of others. (b) a registrable body (within the meaning of that Act) that is registered under Division 1 or 2 of Part 5B.2 of that Act. > consumer property means personal property held by an individual, other than personal property held in the course or furtherance, to any degree, of carrying on an enterprise to which an ABN has been allocated. > Note: Control has an extended meaning in section 341 (control of inventory and accounts in relation to fixed and floating charges). > crops means crops (whether matured or not and whether naturally grown or planted) that have not been harvested, including: (a) a person who owes payment or performance of an obligation that is secured by a security interest in personal property (whether or not the person is also the grantor of the security interest); or (a) in the case of a particular item of personal property—a description that identifies the item, or that identifies a class to which the item belongs; or (b) in the case of a class of personal property—a description that identifies the class, including a description that identifies the class by identifying a larger class of personal property that wholly includes the class. Example 1: A description that identifies collateral as “sheep” (a type of livestock) is sufficient to identify collateral that is sheep wool (a product of livestock, which is a class of collateral wholly included in the larger class of “sheep”). > effective: a registration is effective with respect to particular collateral if it is effective with respect to that collateral under Part 5.4. > expenses, in relation to the enforcement of a security interest in collateral, includes advances, costs and taxes for obtaining possession of, protecting (including insuring), maintaining, preserving or repairing the collateral. > Note: Example: For collateral that is intellectual property, expenses include the costs of legal proceedings against infringers of the intellectual property. > Note: Reasonable expenses in relation to the enforcement of a security interest are taken to be secured by a security interest unless the parties agree otherwise (see subsection 18(5)). (a) for the purposes of the definition of investment instrument in this section—has the same meaning as in Division 3 of Part 7.1 of the Corporations Act 2001; and > financing statement means data registered (or that is to be registered) pursuant to an application for registration under subsection 150(1). (a) an advance secured by a security interest (whether or not made pursuant to an obligation), if the advance is made after the security agreement was made; or > Note: For the meaning of expenses, see the definition elsewhere in this section. Reasonable expenses in relation to the enforcement of a security interest are taken to be secured by the security interest unless the parties agree otherwise (see subsection 18(5)). (d) minerals that have been extracted (including hydrocarbons) in any form, whether solid, liquid or gaseous and whether organic or inorganic; (a) a person who has the interest in the personal property to which a security interest is attached (whether or not the person owes payment or performance of an obligation secured by the security interest); or > Note: Other parts of speech and grammatical forms of “insolvency” (for example, “insolvent”) have a corresponding meaning (see section 18A of the Acts Interpretation Act 1901). > intellectual property means any of the following rights (including the right to be a party to proceedings in relation to such a right): (a) the right to do any of the things mentioned in paragraphs 10(1)(a) to (f) of the Designs Act 2003 in relation to a design that is registered under that Act; (b) the right to exploit or work an invention, or to authorise another person to exploit or work an invention, for which a patent is in effect under the Patents Act 1990; (c) the rights held by a person who is the registered owner of a trade mark that is registered under the Trade Marks Act 1995; (d) the right to do, or to license another person to do, an act referred to in section 11 of the Plant Breeder’s Rights Act 1994 in relation to propagating material of a plant variety; (e) the right to do an act referred to in section 17 of the Circuit Layouts Act 1989 in relation to an eligible layout during the protection period of the layout; (f) the right under the Copyright Act 1968 to do an act comprised in the copyright in a literary, dramatic, musical or artistic work or a published edition of such a work, or in a sound recording, cinematograph film, television broadcast or sound broadcast; (g) a right under or for the purposes of a law of a foreign country that corresponds to a right mentioned in any of paragraphs (a) to (f). > intellectual property licence means an authority or licence (within the ordinary meaning of that term) to exercise rights comprising intellectual property. > inventory means personal property (whether goods or intangible property) that, in the course or furtherance, to any degree, of an enterprise to which an ABN has been allocated: (e) an assignable option to have an allotment of an investment instrument (apart from this paragraph) made to the holder of the option; (j) any financial product that consists of a combination of any 2 or more of the financial products mentioned in paragraphs (a) to (i); (k) the creation or transfer (including a successive transfer) of a right to payment in connection with interests in land, if the writing evidencing the creation or transfer does not specifically identify that land; > jurisdiction, in which personal property, or an individual, is located, has a meaning affected by subsections 235(6) and (7). > land includes all estates and interests in land, whether freehold, leasehold or chattel, but does not include fixtures. > licence means either of the following, if it is transferable by the licensee (whether or not the right, entitlement, authority or licence is exclusive, and whether or not a transfer is restricted or requires consent): > Note: A right, entitlement or authority to which paragraph (c) or (d) applies is not personal property for the purposes of this Act (for the meaning of personal property, see elsewhere in this section). (a) while they are alive—alpacas, cattle, fish, goats, horses, llamas, ostriches, poultry, sheep, swine and other animals; and (c) the products of livestock before they become proceeds (for example, the wool on a sheep’s back before the sheep is shorn). > National Credit Code means Schedule 1 to the National Consumer Credit Protection Act 2009, and includes regulations made under section 329 of that Act for the purposes of that Schedule. (i) the writing is of a kind that, in the ordinary course of business, is transferred by delivery with any necessary endorsement or assignment; or (ii) the writing satisfies the requirements for negotiability under the law governing negotiable instruments (including, but not limited to, instruments that are negotiable instruments within the meaning of this definition); or (f) the creation or transfer (including a successive transfer) of a right to payment in connection with interests in land, if the writing evidencing the creation or transfer does not specifically identify that land; > new value means value other than value provided to reduce or discharge an earlier debt or liability owed to the person providing the value. (ii) is intended to be used for other purposes as well, but is intended to be mostly used for personal, domestic or household purposes; and > registration means a registered financing statement (as amended by any registered financing change statement) with respect to: (a) means a person who holds a security interest for the person’s own benefit or for the benefit of another person (or both); and (b) if the holders of the obligations issued, guaranteed or provided for under a security agreement are represented by a trustee as the holder of the security interest—includes the trustee; and (c) in relation to a registration with respect to a security interest—includes a person registered as a secured party in the registration. > serial number, in relation to collateral, means a serial number by which the regulations require, or permit, the collateral to be described in a registration. > State Family Court, in relation to a State, means a court of that State to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act. > term deposit means a deposit made with an ADI that matures on a particular date (whether or not the ADI can be required to repay the deposit before that date). > wool means the natural fibre from any livestock that produce fleece that can be shorn (such as sheep, goats, alpacas and llamas). (a) the recording of words or data in any way (including electronically), if, at the time the recording was made, it was reasonable to expect that the words or data would be readily accessible so as to be useable for subsequent reference; and (ii) at the time the recording was made, it was reasonable to expect that the words or data would be readily accessible so as to be useable for subsequent reference. (1) The Acts Interpretation Act 1901, as in force at the start of the day on which this Act receives the Royal Assent, applies to this Act. (1) A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property). (2) For example, a security interest includes an interest in personal property provided by any of the following transactions, if the transaction, in substance, secures payment or performance of an obligation: (3) A security interest also includes the following interests, whether or not the transaction concerned, in substance, secures payment or performance of an obligation: (3A) A person who owes payment or performance of an obligation to another person may take a security interest in the other person’s right to require the payment or the performance of the obligation. (a) an account debtor, in relation to an account or chattel paper, may take a security interest in the account or chattel paper; and (a) to postpone or subordinate a person’s right to payment or performance of all or any part of a debtor’s obligation to another person’s right to payment or performance of all or any part of another of the debtor’s obligations; (b) to postpone or subordinate all or any part of a secured party’s rights under a security agreement to all or any part of another secured party’s rights under another security agreement with the same grantor. (c) for a term of up to 2 years that is automatically renewable, or that is renewable at the option of one of the parties, for one or more terms if the total of all the terms might exceed 2 years; or (d) for a term of up to 2 years, or a lease for an indefinite term, in a case in which the lessee or bailee, with the consent of the lessor or bailor, retains uninterrupted (or substantially uninterrupted) possession of the leased or bailed property for a period of more than 2 years after the day the lessee or bailee first acquired possession of the property (but not until the lessee’s or bailee’s possession extends for more than 2 years). (c) a lease of consumer property as part of a lease of land where the use of the property is incidental to the use and enjoyment of the land; or (d) a lease or bailment of personal property prescribed by the regulations for the purposes of this definition, regardless of the length of the term of the lease or bailment. (b) a security interest taken in collateral by a person who gives value for the purpose of enabling the grantor to acquire rights in the collateral, to the extent that the value is applied to acquire those rights; (b) an interest in collateral (as original collateral) that is chattel paper, an investment instrument, an intermediated security, a monetary obligation or a negotiable instrument; or (c) a security interest in collateral that (at the time the interest attaches to the collateral) the grantor intends to use predominantly for personal, domestic or household purposes. (b) the interest is in collateral that (at the time the interest attaches to the collateral) the grantor intends to use predominantly for personal, domestic or household purposes; and (3) If a security interest in collateral secures obligations covered by subsection (7) (purchase money obligations) and other obligations, the security interest is a purchase money security interest only to the extent that it secures the purchase money obligations. (4) If a security interest is granted in personal property (purchase money collateral) that secures a purchase money obligation, together with other collateral, the security interest is a purchase money security interest only to the extent that it is granted in the purchase money collateral. (5) A purchase money security interest does not lose its status as such only because the purchase money obligation is renewed, refinanced, consolidated or restructured (whether or not by the same secured party). (6) In any transaction, if the extent to which a security interest is a purchase money security interest depends on the application of a payment to a particular obligation, the payment must be applied: (b) if the parties do not agree on a method—in accordance with any intention of the debtor manifested at or before the time of the payment; or (ii) to obligations that are secured, but not by purchase money security interests, in the order in which those obligations were incurred; (iii) to obligations that are secured by purchase money security interests, in the order in which those obligations were incurred. (b) for value given to enable the grantor to acquire or use the collateral (provided the collateral is so acquired or used). (8) In this section, a reference to a purchase price, or value, includes a reference to credit charges and interest payable for the purchase or loan credit. (a) a person (including a central securities depository) who holds an Australian financial services licence (within the meaning of the Corporations Act 2001) permitting the person, in the course of business or other regular activity, to maintain securities accounts: (b) a person who operates a clearing and settlement facility under an Australian CS facility licence (within the meaning of the Corporations Act 2001), other than such a person prescribed by regulations made for the purposes of this paragraph; or (c) a person (including a central securities depository) who holds a licence issued under the law of a foreign jurisdiction permitting the person, in the course of business or other regular activity, to maintain securities accounts: (4) An intermediary (including a central securities depository) is an intermediary only while acting in the capacity of an intermediary. (5) A person is not an intermediary for the purposes of paragraph (2)(a) or (c) merely because the person maintains a securities account on behalf of the issuer of the financial products to which the account relates. (6) Without limiting subsection (5), a person is not an intermediary for the purposes of paragraph (2)(a) or (c) merely because the person: (b) records details of interests in financial products in the person’s own books, being interests credited to securities accounts in the names of other persons for whom the person acts as manager or agent or otherwise in a purely administrative capacity. (b) in the case of an intermediary mentioned in paragraph 15(2)(b)—a record of holdings and transfers of interests in financial products. Part 2.2 contains some general principles relating to these security interests, the agreements that govern them and their enforceability. The Part describes how a security interest is attached to personal property and perfected. Part 2.5 sets out circumstances in which a person takes an interest in personal property free of a security interest in the property. Part 2.6 sets out how to work out the priority between competing security interests (and in some cases, other sorts of interests) in personal property. If a specific rule does not deal with the priority between security interests, then the priority is determined in accordance with the default rules in section 55. These principles relate to the enforceability of security agreements against grantors of security interests and third parties. A security interest is only effective if it has attached to collateral. A security interest attaches to collateral when the grantor has rights in the collateral, or can transfer it to the secured party, and value is given, or the security interest otherwise arises. A security interest is only enforceable against a third party if it has attached to collateral and the secured party possesses the collateral, has perfected the security interest by controlling the collateral or has entered into a written security agreement that describes the collateral. This Part also contains rules about how a security interest is perfected and how it is continuously perfected. A perfected security interest has priority over an unperfected security interest, and the security interest that has been continuously perfected for the longest time generally has the highest priority (see Part 2.6 for priority rules). Perfection occurs when a security interest has attached to collateral and any further steps needed to make the security interest effective against third parties have been taken. These steps involve registration on the Personal Property Securities Register or possession or control of the collateral. In certain situations this Act provides for perfection, or temporary perfection, by the operation of the Act itself. (5) A security interest is taken to secure reasonable expenses in relation to the enforcement of the security interest, unless the parties agree otherwise. (1) A security interest is enforceable against a grantor in respect of particular collateral only if the security interest has attached to the collateral. (a) the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party; and (3) Subsection (2) does not apply if the parties to a security agreement have agreed that a security interest attaches at a later time, in which case the security interest attaches at the time specified in the agreement. (4) To avoid doubt, a reference in a security agreement to a floating charge is not a reference to an agreement that the security interest created by the floating charge attaches at a time later than provided under subsection (2). (5) For the purposes of paragraph (2)(a), a grantor has rights in goods that are leased or bailed to the grantor under a PPS lease, consigned to the grantor, or sold to the grantor under a conditional sale agreement (including an agreement to sell subject to retention of title) when the grantor obtains possession of the goods. > Note: A security interest may attach to crops while they are growing, and to the products of livestock, before they become proceeds of the crops or livestock (for example, wool before it is shorn). See subsections 31(4) and (5) (meaning of proceeds) and section 84A (security interests in crops and livestock). (iii) a security agreement that provides for the security interest covers the collateral in accordance with subsection (2). (ii) adopted or accepted by the grantor by an act, or omission, that reasonably appears to be done with the intention of adopting or accepting the writing; and (iii) a statement that a security interest is taken in all of the grantor’s present and after‑acquired property except specified items or classes of personal property. (3) Without limiting subparagraph (2)(a)(i), for the purposes of that subparagraph a grantor is taken to sign writing if, with the intention of identifying the grantor and adopting, or accepting, the writing, the person applies: (4) If particular personal property is described using the term “consumer property” or “commercial property” in the writing evidencing a security agreement, subparagraph (2)(b)(i) is satisfied only if the personal property is more particularly described, in addition, by reference to item or class. (5) If particular personal property is described using the term “inventory” in the writing evidencing a security agreement, subparagraph (2)(b)(i) is satisfied only while the personal property is held or leased by the grantor as inventory. (6) A security interest in proceeds is enforceable against a third party whether or not the security agreement providing for the security interest contains a description of the proceeds. (b) for any collateral, the secured party has possession of the collateral (other than possession as a result of seizure or repossession); or (v) a right evidenced by a letter of credit that states that the letter of credit must be presented on claiming payment or requiring the performance of an obligation; (3) A security interest may be perfected regardless of the order in which attachment and any step mentioned in subsection (2) occur. (1) A security interest that has attached to goods in the possession of a bailee (other than the grantor or the debtor) is perfected if any of the following applies, regardless of when the security interest attached to the goods: (b) the security interest is perfected by possession, as provided by section 21, because the bailee possesses the property on behalf of the secured party; (d) the bailee issues a negotiable document of title to the goods, and the secured party has a perfected security interest in the document. (2) A security interest in goods in the possession of a bailee (other than the grantor or the debtor) is temporarily perfected for the period: (3) The security interest in the goods becomes unperfected at the end of the period mentioned in subsection (2), unless the security interest is perfected otherwise than under subsection (2) before the end of the period. (4) However, subsection (2) does not apply, and is taken never to have applied, unless, before the end of the period of 5 business days after the day of issue of the negotiable document of title: A grantor and secured party cannot both have possession of collateral. There are special rules about possession of the following: Control of certain types of personal property is effective to perfect a security interest in the property (see paragraph 21(2)(c)). This Part includes some special rules about control of the following: (1) A secured party cannot have possession of personal property if the property is in the actual or apparent possession of the grantor or debtor, or another person on behalf of the grantor or debtor. (2) A grantor or debtor cannot have possession of personal property if the property is in the actual or apparent possession of the secured party, or another person on behalf of the secured party. (3) A grantor or debtor to whom goods are transported by a common carrier acquires possession of the goods only when the earlier of the following occurs: (a) the grantor or debtor, or another person at the request of the grantor or debtor, actually acquires possession of the goods; (b) the grantor or debtor, or another person at the request of the grantor or debtor, acquires possession of a document of title to the goods. (4) A person (the first person) has possession of a negotiable instrument that is not evidenced by an electronic record if, and only if, the first person, or another person on behalf of the first person, takes physical possession of the instrument. (a) a single authoritative copy of the record exists which is unique, identifiable and unalterable (except as set out below); and (d) copies or revisions of the record that change the transferee of the authoritative copy can be made only with the participation of the secured party; and (e) each copy of the authoritative copy (or any copy of such a copy) is readily identifiable as a copy that is not the authoritative copy; and (6) Despite subsections (1) and (2), a person (the possessor) has possession of an investment instrument that is evidenced by a certificate if, and only if: (b) a transfer of the investment instrument may be registered on books maintained for that purpose by or on behalf of the issuer (or the certificate states that a transfer of the instrument may be so registered); and (iii) the registered owner (who is not the grantor or debtor) of the investment instrument acknowledges in writing that he, she or it has possession of the investment instrument on behalf of the possessor. A secured party has control of an ADI account for the purposes of section 21 (perfection—main rule) if, and only if, the secured party is the ADI. > Note: Control has an extended meaning in relation to ADIs in sections 341 and 341A (control in relation to fixed and floating charges). (1) A person has control of an intermediated security that is credited to or recorded in a securities account if, and only if, this section so provides. (i) there is an agreement in force between the grantor, the secured party and the intermediary who maintains the securities account; (iii) there is an agreement in force between the grantor and the secured party, and notice of the agreement is given to the intermediary; and (i) the intermediary must not comply with instructions given by the grantor in relation to the intermediated security without seeking the consent of the secured party (or a person who has agreed to act on the instructions of the secured party); or (ii) the intermediary must comply, or must comply in one or more specified circumstances, with instructions (including instructions to debit the account) given by the secured party in relation to the intermediated security without seeking the consent of the grantor (or any person who has agreed to act on the instructions of the grantor). (3) If the intermediary who maintains the securities account is an intermediary because of paragraph 15(2)(b), a reference to the intermediary in subparagraphs (2)(a)(i) to (iii) of this section includes a reference to a person prescribed by regulations made for the purposes of this subsection. > Note 1: Under paragraph 15(2)(b), a person is an intermediary if the person operates a clearing and settlement facility under an Australian CS facilities licence (within the meaning of the Corporations Act 2001), other than such a person prescribed by regulations made for the purposes of that paragraph. > Note 2: The regulations may prescribe a person by reference to a class or classes of persons (see subsection 33(3A) of the Acts Interpretation Act 1901). (3A) A secured party has control of an intermediated security if there is an agreement in force under which the secured party (or a person who has agreed to act on the instructions of the secured party) is able to initiate or control the sending of some or all electronic messages or other electronic communications by which the intermediated security could be transferred or otherwise dealt with. (b) the securities account is maintained in the name of another person (who is not the grantor or debtor), and that person acknowledges in writing that he, she or it holds the intermediated security on behalf of the secured party. (2) A person, other than the debtor or grantor, has control of an investment instrument (whether or not the instrument is evidenced by a certificate) if the issuer of the instrument registers the person as the registered owner of the instrument. (b) the agreement has the effect that the person (or a person who has agreed to act on the instructions of the first person) is able to initiate or control sending instructions by which the investment instrument could be transferred or otherwise dealt with. (i) the issuer of the instrument registers another person (who is not the grantor or debtor) as the registered owner of the investment instrument on behalf of the controller; or (ii) the registered owner (who is not the grantor or debtor) of the investment instrument acknowledges in writing that he, she or it holds the investment instrument on behalf of the controller; and (b) there is an agreement in force under which the controller (or a person who has agreed to act on the instructions of the controller) is able to initiate or control the sending of some or all electronic messages or other electronic communications by which the investment instrument could be transferred or otherwise dealt with. (6) For the purposes of this section, a person has control of an investment instrument even if the registered owner of the investment instrument (who might be the grantor) retains the right: A secured party does not have control of a right evidenced by a letter of credit, to the extent of any right to payment or performance of an obligation by the issuer or a nominated person, unless the issuer or nominated person has consented to assigning the proceeds of the letter of credit to the secured party. (a) the instrument is able to be transferred in accordance with the operating rules of a clearing and settlement facility; and (b) there is an agreement in force under which the secured party (or a person who has agreed to act on the instructions of the secured party) controls the sending of some or all electronic messages or other electronic communications by which the instrument could be transferred. (2) For the purposes of subsection (1), a secured party has control of a negotiable instrument even if the registered owner (who might be the grantor) retains the right: This Part contains rules about when attachment and perfection (including, in some circumstances, temporary perfection) of security interests occurs in particular situations. Proceeds of collateral are identifiable or traceable personal property that is derived from dealings with the collateral. Proceeds also includes certain insurance or indemnity rights, payments in redemption of certain intangible collateral, certain rights of licensors of intellectual property, and certain rights relating to investment instruments and intermediated securities. A security interest in collateral continues in the proceeds (except in certain cases). Division 2 also includes some other rules about the perfection of such interests and their enforcement. Special provisions are made for the perfection and temporary perfection of security interests in proceeds, and for the temporary perfection of security interests in collateral after it is transferred.