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Personal Property Securities
(Commonwealth Powers) Bill 2009
Introduction Print
EXPLANATORY MEMORANDUM
General
The object of this Bill is to refer certain matters relating to security interests
in personal property to the Commonwealth Parliament so as to enable the
Commonwealth Parliament to make laws about those matters. The proposed
Act will be enacted for the purposes of section 51(xxxvii) of the Constitution
of the Commonwealth, which enables State Parliaments to refer matters to
the Commonwealth Parliament.
The Bill operates by reference to the text of the proposed Personal Property
Securities Bill 2009 of the Commonwealth tabled in the Legislative
Assembly of New South Wales on 16 June 2009. In the Bill this text is
called the tabled text. As the Commonwealth Bill contains matters that are
not within the legislative competence of the States, the Bill also contains a
definition of initial referred provisions, which means the tabled text to the
extent to which that text deals with matters that are included in the legislative
powers of the Parliament of the State.
The Bill refers to the Commonwealth Parliament the matters to which the
initial referred provisions relate, but only to the extent of the making of laws
with respect to those matters by including the initial referred provisions in a
Commonwealth Act enacted in the terms, or substantially in the terms, of the
tabled text. In the Bill, this reference is called the initial reference and the
Commonwealth Act enacted pursuant to it is called the Commonwealth PPS
Act.
The Bill also refers certain matters (referred PPS matters) in relation to
different kinds of personal property so as to enable the Commonwealth to
make amendments to the Commonwealth PPS Act from time to time
concerning security interests in those kinds of property. Each of those
references is defined in the Bill to be an amendment reference.
The amendment references relate to the following kinds of personal
property--
561204 1 BILL LA INTRODUCTION 11/8/2009
· personal property (other than fixtures and water rights);
· fixtures (which are goods, other than crops, that are affixed to
land);
· transferable water rights (which are certain transferable rights,
entitlements or authorities, whether or not exclusive, that are
granted by or under the common law or legislation of the State
in relation to the control, use, or flow of water).
The Bill provides for exclusions from the referred PPS matters that are
intended to limit the power of the Commonwealth Parliament to use an
amendment reference to exclude or limit the power of the State to administer,
vary and abrogate any State statutory rights (such as licences) that it creates
from time to time.
The Bill will enable each of the amendment references to be commenced at
different times. For example, the amendment references in relation to
fixtures and transferable water rights will be able to be commenced after the
Commonwealth has enacted an Act pursuant to the initial reference. The Bill
also provides for the termination of the initial reference and also for the
termination of any or all of the amendment references.
Clause Notes
Clause 1 provides for the purpose of the proposed Act.
Clause 2 provides that the Bill commences operation on the day on which
it receives the Royal Assent other than proposed sections 6(2),
6(3), and 6(4) (which make the amendment references to the
Commonwealth Parliament). Proposed sections 6(2), 6(3)
and 6(4) will commence on a day or days appointed by
proclamation of the Governor in Council.
Clause 3 defines certain terms and expressions used in the proposed Act,
including the following--
The expression law of the State is defined to mean any Act of
the State or any instrument made under such an Act, whenever
enacted or made and as in force from time to time.
The expression is intended to cover both existing and future
Acts and instruments as enacted, made and amended from time
to time.
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The expression excluded State statutory right is defined to mean
a right, entitlement or authority that is granted by or under a law
of the State (which is referred to in the proposed Act as a State
statutory right) that is declared by that law not to be personal
property for the purposes of the Commonwealth PPS Act. As a
result of the ambulatory nature of the definition of law of the
State referred to above, the expression will extend to declarations
that are made in relation to both existing and future State
statutory rights.
The expression express amendment is defined to mean the direct
amendment of the text of the Commonwealth PPS Act, but as not
including the enactment of a provision having substantive effect
otherwise than as part of the text of that Act. Each of the
amendment references is limited to the express amendment of the
Commonwealth PPS Act. This ensures that the matters covered
by the amendment references cannot be the source of power for
other Commonwealth legislation.
The expression personal property is defined to mean property
(including a licence) other than--
· land; or
· an excluded State statutory right.
The term licence is defined to mean either of the following--
· a transferable right, entitlement or authority to do one or
more of the following--
· to manufacture, produce, sell, transport or
otherwise deal with personal property;
· to provide services;
· to explore for, exploit or use a resource;
· a transferable authority to exercise rights comprising
intellectual property.
The term licence, however, does not include any excluded State
statutory right.
Clause 4 defines the expression referred PPS matters in relation to
personal property that is the subject of the different amendment
references under the proposed Act. The expression is defined to
mean--
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· the matter of security interests in the personal property;
and
· without limiting the generality of the above, each of the
following matters--
· the recording of security interests, or information
with respect to security interests, in the personal
property in a register;
· the recording in such a register of any other
information with respect to personal property
(whether or not there are any security interests in
the personal property);
· the enforcement of security interests in the
personal property (including priorities to be
given as between security interests, and as
between security interests and other interests, in
the personal property).
The proposed section, however, excludes from the expression the
matter of making provision with respect to personal property or
interests in personal property in a manner that excludes or limits
the operation of a law of the State to the extent that the law
makes provision with respect to--
· the creation, holding, transfer, assignment, disposal or
forfeiture of a State statutory right; or
· limitations, restrictions or prohibitions concerning the
kinds of interests that may be created or held in, or the
kinds of persons or bodies that may create or hold
interests in, a State statutory right; or
· without limiting the generality of the above two
exclusions, any of the following matters--
· the forfeiture of property or interests in property
(or the disposal of forfeited property or interests)
in connection with the enforcement of the
general law or any law of the State;
· the transfer, by operation of that law of the State,
of property or interests in property from any
specified person or body to any other specified
person or body (whether or not for valuable
consideration or a fee or other reward).
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The first and second exclusions from the referred PPS matters
limit the power of the Commonwealth Parliament to use an
amendment reference to exclude or limit the power of the State to
administer, vary or abrogate any State statutory rights (such as
licences) that the State creates from time to time.
The third exclusion from the referred PPS matters is intended,
among other things, to preserve the operation of the laws of the
State that provide for the confiscation of the proceeds of crimes
or for the transfer by or under a law of the State of assets from
defunct bodies.
Clause 5 defines the expression security interest in personal property.
Generally, a security interest in personal property is an interest
in relation to the property provided for by a transaction that, in
substance, secures payment or performance of an obligation
(without regard to the form of the transaction or the identity of
the person who has title to the property). However, the proposed
section also provides that a security interest may encompass
certain other interests provided for by a transaction regardless of
whether or not the transaction secures payment or performance of
an obligation. An example of such an interest is an interest of a
lessor or bailor under a lease or bailment of goods.
Clause 6 deals with the references described in the general overview
above. Clauses 6(1), 6(2), 6(3) and 6(4) make the references.
Clause 6(1) provides for the inclusion of the referred provisions
in a Commonwealth Act enacted in the terms, or substantially in
the terms, of the tabled text. The expression "substantially in the
terms" of the tabled text will enable minor adjustments to be
made to the tabled text.
Clause 6(2) in effect refers matters to the Commonwealth
Parliament in connection with the future amendment of the
Commonwealth PPS Act concerning security interests in personal
property (other than fixtures or water rights).
Clause 6(3) in effect refers matters to the Commonwealth
Parliament in connection with the future amendment of the
Commonwealth PPS Act concerning security interests in fixtures.
Clause 6(4) in effect refers matters to the Commonwealth
Parliament in connection with the future amendment of the
Commonwealth PPS Act concerning security interests in
transferable water rights (other than excluded State statutory
rights).
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Clause 6(5) removes a possible argument that one of the
references might be limited by any of the other references (except
as provided by clause 6(2), which excludes fixtures and water
rights from the reference made by that proposed subsection).
Clause 6(6) makes it clear that the reference of a matter has effect
only to the extent that the matter is not otherwise within the
legislative power of the Commonwealth Parliament and to the
extent that the matter is within the legislative power of the State
Parliament.
Clause 6(7) makes it clear that the State Parliament envisages
that the Commonwealth PPS Act can be amended or affected by
Commonwealth legislation enacted in reliance on other powers
(although this may be the subject of provisions in the
intergovernmental Personal Property Securities Law
Agreement that will underpin the scheme) and that instruments
made or issued under the Commonwealth PPS Act may effect the
operation of that legislation otherwise than by express
amendment.
Clause 6(8) specifies the period during which a reference has
effect. Each reference will begin when the subsection that makes
the reference commences and ends when the period of that
particular reference is terminated under the proposed Act.
Clause 7 deals with the termination of the period of the references
specified under clause 6 (namely, the period ending on a day
fixed by the Governor by proclamation) provided that the
specified day of termination is no earlier than 12 months and
one day from the date the proclamation was published in the
Government Gazette. The clause enables the periods of all
references to be terminated at the same time or only the periods
of any or all of the amendment references.
Clause 8 provides that the separate termination of an amendment reference
does not affect laws already in place. Accordingly, the
amendment reference continues to have effect to support those
laws unless the initial reference is also terminated.
Clause 9 provides for the accuracy of a copy of the tabled text containing
the proposed Commonwealth PPS Act to be certified by the
Clerk of the Legislative Assembly of New South Wales. Such a
certificate is evidence of the accuracy of the tabled text and that
the text was in fact tabled as contemplated by this Bill.
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