14 August 2018

We get asked all the time if registering on the PPSR is worth the time and investment. So, we put this question to two of our clients: Ausco Modular and Moxon Timbers. Their responses make for an interesting read and will help you decide whether you should go ahead and register your business.

Ausco Modular Pty Ltd has survived multiple customer insolvencies

Ausco hires and sells modular infrastructure to customers throughout Australia, subject to Retention of Title (ROT).

It acted swiftly to protect its position soon after the introduction of the Personal Property Securities Act (PPSA) to Australia. They engaged our PPSR experts to provide consultancy and registration services.

Due to the high value of its hire fleet, and relatively low registration costs, Ausco decided to register against all customers. Since then, despite facing a number of customer insolvencies, they haven’t lost a single building.

“We’ve had two major insolvencies so far with the receiverships of a large hire company in WA and a large Australian based international electrical and refrigeration services company”, explains Diane Slack, Ausco Modular.

“Both of these had active hire contracts with Ausco Modular when they became insolvent. Had we not registered on the PPSR, and registered correctly, thanks to EDX, our losses would have been hundreds of thousands of dollars and perhaps even into the millions of dollars.

“We’ve also had smaller insolvencies which, cumulatively, would have resulted in a considerable loss.”

Moxon Timbers has saved ten times over what they have spent on the PPSR

Moxon supplies wood, wood products and wooden flooring to customers nationwide on credit terms that contain a Retention of Title clause (ROT).

When first referred to our PPSR experts by its debtor insurers, Moxon was unaware that its ROT clause would no longer be enforceable without registration on PPSR.

Its first major insolvency has more than justified its investment in registering. Moxon began trading with a well-known Brisbane timber merchant, and both companies enjoyed a successful trading relationship. Although the merchant was slow to pay its debts, there was no indication of the company’s impending insolvency, and Moxon had delivered a considerable amount of stock in the days prior.

“The timber merchants were our first major insolvency since the PPSA began. We managed to recover more than ten times the total cost of becoming PPSA compliant”, recalls Aron Narayan, Moxon.

“The Voluntary Administrators were clearly looking for a way to keep our stock but, thanks to the expert advice we received from EDX, our registrations were done correctly, with all loopholes covered.

“We feel that if we didn’t have PPSR specialists advising us, the stock supplied to the timber merchant wouldn’t have been recovered and we would have suffered a considerable financial loss.”

We’ve helped hundreds of clients like these – in sectors ranging from banking and finance to trade credit and equipment hire. If you need practical help and expert guidance dealing with the PPSR, email us to find out how we can help you accurately and efficiently setup, monitor and maintain your registrations. 

Did you Know – it now only costs $6 to take out a seven-year registration on the PPSR? The Australian Financial Security Authority has reduced the government PPSR fees, effective 1 August 2018. For every DIY registration you make through the government PPSR website, you pay:

  • Registrations – up to 7 years – new fee is $6.00 (reduced from $6.80)
  • Registrations – for 7–25 years – new fee is $25 (reduced from $34)

Registrations – no end date – new fee is $115 (reduced from $119).

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.