Retention of Old Titles: Pre-PPSA Retention of Title Agreements and Unfair Preferences

Abstract

The Personal Property Securities Act 2009 (Cth) introduced significant and sweeping changes to the classic understanding of a ‘security interest’. Gone are the days of merely charges or liens, and in their place an expanded concept of what can constitute a security interest. As the Act remains in its infancy, questions continue to arise as to its proper interpretation and operation. One such question which came before the courts recently was the effect of pre-PPSA transactions – particularly retention of title agreements or Romalpa clauses – and their interaction with the unfair preference provisions of the Corporations Act 2001 (Cth). This article will examine the two contrasting views reached by the Victorian Supreme Court in Blakeley v Yamaha Music Australia Pty Ltd and the Federal Court of Australia in Hussain v CSR Building Products Limited. This article will examine the contrasting approaches taken in each decision, while ultimately positing the view that the decision in Blakeley strikes the most appropriate balance between the strikes a more appropriate balance between the changing role of PPSA security interests and the unfair preference provisions of the Corporations Act.