Ross Parsons Centre Law and Business seminar | Law Reform & The PPSA: Why We Should Delete s 267 and Corporations Act s 588FL

Online event

The Government’s response to the Statutory Review of the Personal Property Securities Act 2009 (Cth) (‘PPSA’) has been released, including an Exposure Draft containing its proposed amendments. We are currently within an eight-week consultation period closing on 17 November 2023, which makes this an opportune time to discuss reforms to improve the operation of the PPSA.

This seminar concerns s 267 of the PPSA and s 588FL of the Corporations Act 2001 (Cth), which are termed the ‘vesting provisions’. The former provides that an unperfected security interest ‘vests in the grantor’ upon the occurrence of specified events indicating the grantor’s insolvency. The latter provides that, where a security interest is perfected only by registration and the grantor is a company, that security interest ‘vests in the company’ upon the occurrence of specified events indicating the company’s insolvency if the registration time is outside one of several time periods. Much of the debate concerning these provisions thus-far has focused on s 588FL due to its more stringent timing requirements, and there seemed to be consensus that this provision is unnecessary and should be deleted. Surprisingly however, the Government proposed retaining it in its recent response to the Statutory Review of the PPSA.

In this seminar I will take a step back from the debate specifically concerning s 588FL, and consider the broader question of what the vesting provisions seek to achieve in the first place. First, I will identify their commercial significance by considering when they lead to different outcomes than those which would occur anyway under other provisions of the PPSA. Secondly, I will identify the purported policy objectives underlying the vesting provisions, and argue that none of these sufficiently explain their operation. Thirdly, I will identify the costs of retaining these provisions, and argue that these cannot be satisfactorily addressed through more discrete amendments to their scope. This leads me to conclude that, while it may at first appear to be a radical solution, we should delete both s 267 and s 588FL.

About the speakers

Adam Waldman

Adam Waldman is the Colin Phegan Associate Lecturer at the University of Sydney Law School. His field of research is commercial law, with a particular focus on the Personal Property Securities Act 2009 (Cth) (‘PPSA’) and, more generally, on the relationship between statute and the general law. Adam is also a PhD candidate at the University of Sydney Law School, and his ongoing doctoral research examines the interaction between equity and the PPSA through the lens of the notion of unconscionability.

Adam teaches in Equity, Introduction to Property and Commercial Law, Torts and Contracts II, and Legal Reasoning. He is also a lecturer for the Legal Profession Admission Board’s Diploma in Law, where he lectures on personal property in Commercial Transactions.

Adam has previously worked at a boutique law firm, as a research assistant to counsel in chambers and as a research assistant to a former Supreme Court judge. He has also worked as a researcher at the University of Sydney and the University of New South Wales, in the areas of insolvency, corporations law, and banking and financial law.

Commentator: Tony Ryan (Consultant, Ashurst)

Tony Ryan is a consultant in the restructuring, insolvency and special situations practice of Ashurst’s Sydney Office. Tony advises on all aspects of corporate insolvency and restructuring law, including voluntary administration, deeds of company arrangement, schemes of arrangement, receivership and liquidations and has been involved in a number of significant cross-border matters including acting as lead partner on the liquidation of MF Global, a major global financial services and derivatives broker group and one of the largest and most complicated bankruptcies in corporate history, and the liquidation of HIH Insurance Limited, a major insurance company with assets worldwide and the largest corporate insolvency in Australia. Tony is the NSW co-chair of the Insolvency and Restructuring Committee of the Business Law Section of the Law Council. Tony also lectures in insolvency and corporate finance law for Sydney Law School.

Chair: Dr Jason Harris (Professor of Corporate Law and Director of the Ross Parsons Centre at Sydney Law School)

Tuesday 3 October, 6-7pm AEST

CPD points: 1

This event is proudly presented by Sydney Law School at the University of Sydney.