In the fourth instalment of our PPSR collateral series we look at registering security interests against watercraft and certain categories of intangible property:
For the purposes of the Personal Property Securities Act 2009 (Cth.) (PPSA), “Watercraft” is defined in the Personal Property Securities Regulations 2010 (Cth) (PPS Regulations) to means a boat or vessel, other than a seaplane, that is used, or intended to be used, in navigation by water or for any other purpose on water and that has:
- a hull identification number (HIN); or
- an official number, issued by the Australian Shipping Registration Office via the Australian Maritime Safety Authority (AMSA)
The HIN is considered to be the nautical equivalent of a Vehicle Identification Number (VIN) for a motor vehicle and is used to uniquely identify the watercraft.
Generally, outboard motors are considered to be “Other Goods” under the PPSA and do not fall within the definition of Watercraft. However, pursuant to r 9.1 of the PPS Regulations, the definition of Watercraft will extend to an outboard motor that has a manufacturer’s number under if the outboard motor is subject to a “Transitional Security Interest”, as defined in the PPSA, and the outboard motor was registered on a transitional register.
Registration Requirements – Watercraft
If the personal property is considered to be Watercraft under the PPSA and PPS Regulations, then the registration requirements are determined by whether the property is commercial or consumer property of the grantor in accordance with the PPS Regulations. For more information on the Consumer and Commercial Property distinctions, please head back to Part 1 of the Series.
A commercial Watercraft may be described by serial number but must be registered over the grantor in accordance with Schedule 1 of the PPS Regulations.
A consumer Watercraft must be described by the serial number (but may include the individual grantor’s details). If the Watercraft must be described by serial number, Schedule 1 Pt 2.2(3)(d) of the PPS Regulations provides the serial number details that are needed for a valid ‘Watercraft’ registration as follows:
- The Official Number;
- If it has no Official Number, but a HIN – the HIN; or
- If it has no Official Number or HIN – the manufacturer’s number.
Intangible Personal Property
“Intangible Property” under the PPSA is personal property (including a licence) that is not financial property, goods or an intermediated security. It usually includes “Accounts”, “General Intangible” and “Intellectual Property” as defined under the PPSA.
- a design;
- a patent;
- a plant breeder’s right;
- a trade mark; and / or
- a licence (as defined in the PPSA) over any over the above property,
(Serial Numbered Intangible Property)
Registration Requirements – Serial Numbered Intangible Property
The registration requirements for Serial Numbered Intangible Property are determined by whether the property is commercial or consumer property of the grantor in accordance with the PPS Regulations. For more information on the Consumer and Commercial Property distinctions, please head back to Part 1 of the Series.
Consumer Serial Numbered Intangible Property must be described by the serial number (but may include the individual grantor’s details). If the intangible property must be described by serial number, Schedule 1 Pt 2.2(3) of the PPS Regulations provides the serial number details that are needed for a valid registration as follows:
- The design number / patent number / plant breeder’s right number / trade mark number issued by IP Australia; or
- If no number has been issued by IP Australia – the application number issued by IP Australia.
For Patents, if there is no number or application number issued by IP Australia, a Patent Cooperation Treaty (PCT) number is to be used.
If the property is a licence then it must be described by the serial number of the right (i.e. property type) for which the licence is given.
Pursuant to s 165(a) of the PPSA, a security interest registration will be considered defective if the collateral must be described by serial number and a search of the serial number is unable to identify the registration (i.e. there is an error in the serial number or no serial number was included in the registration).
Stay tuned for our final part of the series on a person’s ability to take personal property free of a security interest if serial number is incorrect or missing under s 44 of the PPSA.