14 April 2026
From a liquidator’s perspective, non‑registration or defective registration on the Personal Property Securities Register (“PPSR”) remains one of the most common reasons creditors lose priority and, in many cases, recover nothing in an insolvency.
In most insolvency appointments, one of our early tasks is to determine the priority of competing claims over company assets. That exercise is heavily influenced by PPSR registrations. Where a creditor has failed to register, or cannot support a registration with enforceable documentation, the outcome is often commercially severe and entirely avoidable.
Security Interests Apply to More Arrangements Than Many Businesses Realise
Despite the Personal Property Securities regime having been in place for well over 25 years, many businesses remain unaware that it applies to a wide range of ordinary commercial arrangements, including:
The supply of goods on retention of title terms
Leases of goods for more than one year (or for an indefinite term)
Consignment stock arrangements
In each of these scenarios, creditors frequently assume their ownership rights or contractual terms protect them. In a liquidation, however, those assumptions can carry little weight unless the security interest has been validly created and properly registered on the PPSR.
Registration Alone Is Not Enough
A recurring issue for businesses placed into liquidation and receivership is creditors who have either not registered at all, or who have registered but cannot produce documentation that legally supports the claimed security interest.
Valid and enforceable terms and conditions of trade, signed lending and loan documentation or financing agreements among others, with registration of a Financing Statement on the PPSR, are essential if a creditor expects to recover goods or the proceeds of sale of those goods. One without the other often provides little practical protection.
It is common for liquidators to encounter PPSR registrations that:
Are unsupported by any signed or agreed security agreement
Do not accurately reflect the terms relied upon
Contain errors in debtor details or collateral descriptions
In such cases, the registration may be ineffective and disregarded when determining priority.
Priority Is Determined Strictly
When distributing assets, liquidators must apply the Personal Property Securities Act. There are often multiple competing security interests over the same assets some valid and perfected, others not.
Creditors who have correctly created and registered their security interests will generally gain priority over unsecured creditors and, in some cases, over other secured parties when there are multiple valid secured parties the timing of registration becomes important. Those who have not are typically relegated to the unsecured pool is there is a shortfall from the sale of the asset.
For example, a supplier with a valid retention of title clause / specific security who has registered that interest on the PPSR will usually rank ahead of a General Security Agreement (“GSA”) holder and preferential creditors in regard to the specific secured assets. Without registration, the retention of title clause is generally ineffective, and the supplier will rank behind the GSA holder and preferential creditors frequently resulting in no recovery.
A Persistent and Costly Mistake
Despite the maturity of the PPSR regime, we continue to routinely encounter situations where creditors have failed to register security interests associated with leases or retention of title arrangements. In many cases, the absence of a registration directly results in the creditor losing priority and recovering nothing.
From a liquidator’s perspective, these outcomes are neither unusual nor unexpected they are the natural consequence of failing to comply with the PPSR framework.
Cost Versus Consequence
The cost of PPSR registration remains minimal when compared with the potential consequences of non‑registration. As at the time of writing (April 2026), the fee to register a Financing Statement is $16.10 (including GST). By contrast, we frequently see creditors lose claims worth many thousands of dollars simply because a registration was not made, was incorrectly completed, or was not supported by enforceable documentation. This seems a waste for the potential saving of $16.10. Creditors do not need to register every individual supply to a customer on the PPSR, one valid registration will cover the account and is renewed every 5 years.
A Final Observation from a Liquidator’s Perspective
In an insolvency, outcomes are not determined by commercial fairness, historical relationships, or what the parties believed was agreed. Priority is determined by legislation that requires the existence of a valid security interest, proper PPSR registration, and accurate supporting documentation.
Creditors who attend to these matters early place themselves in a much stronger position if their customer becomes insolvent. Those who do not often only become aware of the importance of the PPSR once it is too late to fix.