Sladen Snippet – Changes to the PPSA definition of motor vehicle

Effective from 1 July 2014, the definition of “motor vehicle” under the Personal Property Securities Act 2009 (PPSA) has been amended to include a motor vehicle that:

  • is capable of travelling at more than 10km/hr; and
  • has a total motor power greater than 200W.

This amendment has narrowed the meaning of motor vehicle and now excludes motorised equipment that was previously registrable under the motor vehicle provisions. Security interests in motorised vehicles should be double checked to ensure the vehicle meets the new definition and whether it can still be classified as a motor vehicle for PPSA purposes.

This amendment can have significant implications if a business fails to:

  • conduct both pre 1 July 2014 and post 1 July 2014 searches of the Personal Property Securities Register (Register); and
  • register motorised equipment under the correct collateral class, taking into account the narrower definition of motor vehicle.

Grantor Search Requirement

In respect of motorised equipment, a search of both the serial number and Grantor must be conducted due to the definition change. This will capture interests in equipment that were previously described by serial number only but can now be described in different ways. Therefore, both a pre-1 July 2014 and a post 1 July 2014 Grantor search must be undertaken to determine if there is a pre-existing security interest in the equipment.

Registration Procedures

When registering a security interest, consideration must now be given to whether the motorised equipment will meet the new definition of motor vehicle. If the motorised equipment does not meet the new definition then it must be registered in a different collateral class such as ‘other goods’.

Importantly, the legislative changes do not apply retrospectively. That is, if the security interest was validly registered before 1 July 2014 and met the previous definition of motor vehicle then it will remain valid. However, registrations after 1 July 2014 must meet the new definition to be valid and enforceable.

For further information please contact Meagan O’Connor or Luke Duggan.

Meagan O'Connor
Sladen Legal
+61 3 9611 0106

Luke Duggan
Sladen Legal
+61 3 9611 0176