The floating charge under the PPSA: The current state of play
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Open Access
Type
ArticleAuthor/s
McCracken, SheelaghAbstract
Since its recognition by 19th-century English courts, the floating charge has been a form of security favoured by lenders and corporate borrowers. Although the Personal Property Securities Act 2009 (Cth) (PPSA) is generally acknowledged as modifying this charge when taken over ...
See moreSince its recognition by 19th-century English courts, the floating charge has been a form of security favoured by lenders and corporate borrowers. Although the Personal Property Securities Act 2009 (Cth) (PPSA) is generally acknowledged as modifying this charge when taken over personal property (as defined), both the manner and the extent of modification are controversial. This article contends that the floating charge over personal property is absorbed into the statutory regime as a security interest over present and after-acquired property, thereby attracting statutory attributes. It thus challenges judicial dicta recharacterising the floating charge (and other property interests constituting security interests) as a new statutory generic interest. As a matter of statutory construction, the property interest created by the parties operates under s 19 of the PPSA as a fixed, rather than floating, security interest. Consequently, the article further contends that the PPSA necessarily addresses the grantor's ability to deal with the collateral differently from the general law, and infers that additional statutory rules may be required to address commercial demands.
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See moreSince its recognition by 19th-century English courts, the floating charge has been a form of security favoured by lenders and corporate borrowers. Although the Personal Property Securities Act 2009 (Cth) (PPSA) is generally acknowledged as modifying this charge when taken over personal property (as defined), both the manner and the extent of modification are controversial. This article contends that the floating charge over personal property is absorbed into the statutory regime as a security interest over present and after-acquired property, thereby attracting statutory attributes. It thus challenges judicial dicta recharacterising the floating charge (and other property interests constituting security interests) as a new statutory generic interest. As a matter of statutory construction, the property interest created by the parties operates under s 19 of the PPSA as a fixed, rather than floating, security interest. Consequently, the article further contends that the PPSA necessarily addresses the grantor's ability to deal with the collateral differently from the general law, and infers that additional statutory rules may be required to address commercial demands.
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Date
2019Source title
Australian Business Law ReviewVolume
47Issue
6Publisher
Thomson ReutersLicence
Copyright All Rights ReservedRights statement
This article was published by Thomson Reuters and should be cited as: McCracken, S (2019). The floating charge under the PPSA: The current state of play. Australian Business Law Review, 47(6), 418-441. For all subscription inquiries please phone, from Australia: 1300 304 195, from Overseas: +61 2 8587 7980 or online at legal.thomsonreuters.com.au/search. The official PDF version of this article can also be purchased separately from Thomson Reuters at http://sites.thomsonreuters.com.au/journals/subscribe-or-purchase. This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act 1968 (Cth), no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to Thomson Reuters (Professional) Australia Limited. PO Box 3502, Rozelle NSW 2039. legal.thomsonreuters.com.auFaculty/School
The University of Sydney Law SchoolShare