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When dealing with security interests in New Zealand, you should make sure that you are familiar with the Personal Property Securities Act 1999 (PPSA). The PPSA governs the relationship around security interests in New Zealand. One of the features of the PPSA is the Personal Property Securities Register (PPSR). This is a database of all registered security interests in New Zealand. The database is accessible by the public so that businesses and individuals know who has a security interest over what. If you register goods on the PPSR via financing statements, they are called collateral. In addition, you will register certain collateral on the PPSR using its serial number. This article will explain what serial numbered goods are for the PPSR in New Zealand.

What is the Purpose of the PPSA?

The PPSA governs how to deal with security interests in New Zealand. It sets out what a security interest can be and who has the highest priority in case the security interest has to be called on. It is an important piece of legislation in New Zealand and is based on a similar act in Australia. Those who have registered their security interest on the PPSR have the highest priority. Security interests that are registered are known as perfected security interests. 

What Are the Different Types of Collateral?

Collateral must be registered on the PPSR when you are perfecting security interests. This is so that both parties are aware of what good is at stake. Many goods can be collateral for the purposes of the PPSA. These include:

  • motor-vehicles;
  • aircraft;
  • livestock; and
  • crops.

There are also other types of collateral such as:

  • documents of title (for example, bills of lading, warehouse receipts);
  • chattel paper (for example, hire purchase agreements);
  • investment securities (for example, shares, options);
  • negotiable instruments (for example, a promissory note, a letter of credit);
  • money (for example, NZ dollars, Japanese yen, a bank deposit of $NZ8 million lodged with a bank);
  • intangibles (for example, trademarks, patents and copyright, accounts receivable); and
  • all present and after-acquired personal property.

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What Collateral Has to Be Registered by Its Serial Number?

You must register certain collateral on the PPSR by its serial number. These are known as serial numbered goods. For example, unlike Australia, when entering a motor vehicle as collateral on the PPSR, you will use the vehicle’s registration number or the vehicle identification number. 

Another example of one type of collateral that must be registered by its serial number is an aircraft. Therefore, you must provide both the serial number and the registration mark when you register an aircraft on the PPSR. 

Furthermore, there are specific ways to ensure that you protect yourself when registering collateral on the PPSR using its serial number. First, you should make sure that you take a photograph of the machine serial number when you register it on the PPSR. This ensures that you will register the item against all possible variations of the serial number. In addition, taking a photograph ensures that the serial number is accurate if you make a mistake when entering it in or have only included part of the serial number. 

Why Should I Register My Security Interest on the PPSR?

Registering your security interest on the PPSR means that you have the highest priority if your debtor cannot meet their obligations. This means that you can take the good back. If you do not register your security interest on the PPSR, then you will only have an unperfected security interest. This means that if there any perfected security interests over the same goods, those will always take priority. Therefore, you may not be able to recover your debt.

Key Takeaways

The PPSA is important legislation that consolidated the case law around security interests and priority. The PPSR came out of the PPSA and is a public database that anyone can access. It contains all registered financing statements and security interests. You can register certain serial numbered goods as collateral using its serial number. However, you should take extra steps when doing so, such as photographing serial numbers to be sure that it is accurate. If you need help with loan contracts, our experienced corporate lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page

Frequently Asked Questions

Do I have to provide a serial number for my collateral under the PPSA?

For some serial numbered goods, such as aircraft, you must provide a serial number when registering it under the PPSA.

Do I have to register my security interest on the PPSR?

There is no legal requirement to register your security interest on the PPSR but it is recommended you do in order to perfect your security interest. 

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