Hire and Rental News - August 2015

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EQUIPMENT NEWS
The amendment means there will no
longer be a lower 90 day threshold for the
existence of a ‘PPS lease’ security interest.
The 90 day threshold previously applied to
‘serial number registrable’ goods including
motor vehicles (as defined in PPSA),
aircraft and their engines and watercraft.
Once the amending Act takes effect, a
uniform threshold of one year will apply
to all kinds of hires of goods, whether or
not the goods are of the serial number
registrable kind.
While the abolition of the lower 90 day
time threshold for some goods is welcome
for hire businesses who hire out serial
number registrable kinds of goods, it is
important to note:
• the amendment still awaits proclamation
before taking effect. This should happen
sometime in the next six months. Until
then the current law applies;
• an ‘indefinite’ hire will still be a PPS
lease from inception. So the PPSA will
still catch very short term hires of even
few days or hours if they don’t have a
contractually agreed end date of less
than one year. It is likely the indefinite
hire concept will be taken out of the
PPSA in due course but that reform
is some time away and has yet to be
formally proposed by Government;
PPSA update for hire businesses
The 90 day ‘PPS lease’ is set to be abolished but plenty of pitfalls remain.
• hires of more than a year will still be
caught by PPSA as ‘PPS leases’ and we
note option periods are counted towards
the one year;
• any hire that functions ‘in substance’
as a security interest will also still be
caught by PPSA from inception – for
example: rent to buy or hire purchase
arrangements;
• the amendment will only apply to
transactions entered into after it
commences.
While the amendment will reduce the
number of hires that give rise to ‘PPS lease’
security interests, it does not abolish the
concept of serial number registration.
So where there is a PPS lease or other
security interest in respect of serial
number registrable goods it is important
to consider whether to make a serial
number registration to gain the benefits
of specific registration. Those benefits are
mainly around protection against loss of
ownership through a wrongful sale by a
customer.
Further reform – a priority for
the hire industry
The hire industry continues to press for
the complete abolition of the PPS lease
concept so no typical hire would fall into
By Oliver Shtein – Bartier Perry
The Personal Property Securities Amendment (Deregulatory Measures) Act 2015 became an
Act on 25 June, 2015 assented to by the Governor-General.
the PPSA. Hires would only fall into PPSA
if they otherwise qualify as a security
interest in substance. Typical hires in the
industry would not meet that test because
it would usually be satisfied only in
finance-type transactions such as finance
leases, instalment sales or hire purchase.
If the industry is successful in its
submissions, typical hire businesses would
not have to worry about PPSA.
This question of PPSA and the hire
industry is with the Government
following tabling of the Whittaker Report
in Federal Parliament in March this
year. Unfortunately that report did not
recommend changing the law in the way
the industry has been urging.
The way the Government responds to
the Whittaker Report will be critical for
the industry because it is likely to shape
the scope of the legislation for some
time to come. The HRIA and EWPA have
urged members to make known to their
local member of Federal Parliament their
concerns about the risks and expense they
face caused by the Act. The responsible
members of the Government are the
Attorney-General George Brandis and the
Parliamentary Secretary with responsibility
for reduction of red tape, Christian Porter.
Visit:
Crommelins' new purpose-built fabrication
facility builds heavy duty steel roll frames
for all Crommelins products and can
help with replacing frames for existing
Crommelins products or make custom
frames to specifications.
The service is especially useful for portable
powered equipment out of service because
of a damaged frame or an un-serviceable
engine.
The new roll frames can be powder-coated
in corporate colours or galvanized. Subaru
petrol and diesel engines are also available,
to repower most brands of engines that
Time to re-frame, repower or renew at fabrication facility
have become unserviceable or too costly
to repair. Subaru engines are backed by a
three year warranty. Crommelins products
are assembled and tested in the West
Australian manufacturing department and
each piece is built to suit the hire industry
or customised to suit specific needs for any
industry.
Crommelins understand the demands on
products used in the hire industry and
state: “Nothing is too hard for us.”
Visit: or contact
East Coast 1300 650 659,West Coast
08 9350 5588.
Covered in cement, this Drive Unit needs a major
overhaul
HIRE AND RENTAL NEWS • AUGUST 2015 60