The first of a series of four consultation papers in connection with the review of the operation of the Personal Property Securities Act 2009 has been released.

The first consultation paper considers the reach of the Act. It looks at:

• the types of legal relationships to which the Act should apply;
• the types of property to which the Act should apply (the meaning of “personal property” and deemed security interests);
• what exemptions might be desirable.

The paper makes 41 proposed recommendations including that the Act not be repealed, but rather that it be amended, to enable it to better achieve its potential.

The recommendations include that the Act continue to apply to some types of longer–term leases, whether or not they operate in substance as security for payment or performance of an obligation.

However in some specific cases (eg turnover trusts, cash deposits, supplies of fit-out) the paper recommends that no amendments be made.

The next 3 papers, to be released by 31 October will cover:
Paper 2 – Creation and perfection of security interests; dealings in collateral; priority and taking free rules
​Paper 3 – Enforcement of security interests; Particular types of collateral; interaction with other legislation; miscellaneous provisions.
​Paper 4 – The register.