Hire and Rental News

54 | ACCESS

ACTION | MAY 2012

ACCESS in ACTION

“We’re still at the start of trying to

manage the process of implementing the

PPSA,” Tim said.

“We’re still trying to come to grips

with managing the change in legislation

and how it affects our business. Basically

we’re still getting conflicting legal advice

when considering a couple of areas of the

legislation.

“Indefinite hire is one of those areas.

Rental companies like us and most,

smaller general hire companies don’t have

defined periods of hire. In essence, most

of our hire periods are indefinite. The

way the legislation reads, if you have an

undefined hire period you need to register

the equipment the day before the hire

commences.

“When the hire period is defined,

however, you have up to 90 days to register

it under the PPSR (Personal Property

Security Register).

“If you decide to register the cost is

approximately $7.40 per registration. You

are registering yourself as the secured party

and the customer is the grantor and once

you’ve done that, you’ve perfected your

asset.

“The legislation indicates we need to

“If you have long term hires, say five

years, then it makes sense to register on the

PPSR at the start of the hire.

“Once you’ve registered your equipment,

you’ve protected your asset against

customer creditors.

“If you don’t perfect your asset then the

title has been extinguished and possession

is the determining factor. If the customer

is paying for it, then it can be deemed an

asset of that business and it can therefore

be confiscated by any creditors to pay any

debts of the failing customer.

“It’s scary. There are a lot of people out

there who have no idea of the implications

of this legislation.

“We haven’t fully quantified the

complete management requirements either.

Some businesses have made the decision

not to register their assets against their

customer because the cost would result in a

potential loss.

“We all have to keep in mind the only

time you’ll lose is if one of your customers

goes bust.

The PPSA and the access hire industry

Tim Nuttall, Managing Director of Access Hire and National President of the EWPA said he is still coming to terms

with the implications of the introduction of the Personal Property Securities Act and what it will mean for his

business and the access and hire industry overall. He sees it could have far reaching ramifications.

“Think about the figures. Some big hire

companies have 30,000 transactions a week

and it costs $7.40 to register your assets

across every transaction. The sum equates

to 30,000 x 52 weeks x $7.40 per transaction

which equals approximately $11m to

“There are a few things we can be

assured of. You’ll never lose your assets

to a government hire. Nor is it likely big

corporate customers like, for example, a

blue chip company such as BHP, are going

to go belly up suddenly. So assets won’t

need to be registered for those hires.

“The HRIA has been an enormous help in

trying to understand this legislation.

“The general solicitor out there or

accountant has no real understanding of

this legislation and how it will affect various

businesses. I would think there are a large

proportion of legal and financial advisors

who don’t know about it at all.

“We are still in discussion with our own

lawyers about which way to go - should we

90 day leeway period?

“At this stage I’m hopeful we will have

the 90 days grace, so technically I think I’m

covered. Now I need to begin printing out

hire lists to see what equipment is out and

for how long and whether it needs to be

registered.

“I thought I had solved the problem

at one stage by registering every item

against every customer. But this equated

to an average of 300 customers times 350

machines times $7.40 registration fee which

equaled a total of $777,000. That is just not

affordable.

“When we’re talking about machines

worth between $16,000 and $300,000 it

could be a costly exercise to not take action.

Access hire businesses have a lot to lose.

“The whole process has been very time

consuming. We’ve spent hours and hours

just trying to understand the legislation let

alone implement any systems or processes

to manage it. Fortunately the big hire

companies have been very helpful and have

been sharing their legal advice with us

smaller players.

“Another area where we’re floundering

is the area of rehire and control. First let’s

look at the issue of control. Initially we

thought if we had an asset on a hire with

Tim Nuttall, Managing Director of Access Hire and National President of the EWPA

continued on page 56