Happy Wood’s CFO consulted with Lynne Walton shortly after the introduction of the Personal Property Securities Act (“PPSA”) following advice from its bank that it should consider registering on the Personal Property Securities Register (“PPSR”) so as to maintain its Retention of Title (‘ROT”) rights to its wood supplies made to customers.
It is understood that a boardroom disagreement ensued with the company’s CEO failing to see the value in Happy Wood registering on PPSR. The CFO insisted and the company made the wise decision to proceed with amending its terms and conditions of trade to include PPSA clauses and registering its security interest on the PPSR.
Approximately 4 months later, Happy Wood supplied approximately $400k worth of wood to Forsyth & Romano – a company that it had traded with for more than 20 years. The wood was delivered on a Friday afternoon. To Happy Wood’s astonishment a Voluntary Administrator was appointed the following Tuesday.
The wood was untouched and clearly marked as having been supplied by Happy Wood.
Forsyth & Romano’s Voluntary Administrator made some attempts to question the PPSA claim but they were futile as the claim was clearly sound.
The Voluntary Administrator agreed to allow Happy Wood to collect the $400k of wood it had delivered the week before. The claim was settled within a week.
Happy Wood was delighted with the outcome. The CFO was ecstatic. The CEO wasn’t quite as thrilled!
This is yet another example of the benefits of registering on PPSR. If Happy Wood hadn’t registered it would have lost its rights to the wood supplied and lost $400k worth of wood despite the fact it had a ROT clause in its terms and conditions of sale. ROT clauses are now ineffective without a registration on PPSR to support them.
It is important that ROT suppliers not only register correctly on PPSR but that they understand their rights. Access PPSR helps its clients enforce their rights with vigour. We can help you to come out on top too.
*Name changed to protect client privacy.