Although we have been operating under the Personal Property Securities Act 2009 (Cth) (PPSA) for a number of years, this area of law continues to generate disputes because of the complexity of the legislative regime and the ramifications of being an unsecured creditor of an insolvent entity.
Even the seemingly uncontroversial concept of "possession" has been a source of dispute between contractual counterparties of an insolvent grantor. As one of the three ways in which a security interest in certain property can be perfected for the purposes of the PPSA, and where the timing of possession is critical for the super priority of a purchase money security interest (PMSI), "possession" assumes fundamental importance in the personal property regime. It is for this reason that recent guidance from the courts is particularly welcome.
Possession: What does "perfection by possession" actually mean?
The first judicial guidance on the concept of "perfection by possession" was given in Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (In Liquidation)(Receivers and Managers Appointed)  FCA 866.