George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

The purpose of the Personal Property Securities Bill 2009 and related bill is to provide for a single national law to deal with personal property securities. Although the debate on these bills will occupy but a few minutes, the bills themselves are a most extensive piece of law reform not politically controversial but of very far-reaching legal consequence, which is the product of many years of work by many lawyers and policymakers concerned.

The reforms, which these bills will implement, will address the complexity of over 70 Commonwealth, state and territory laws, common law rules and laws of equity governing personal property securities. They will provide a modern and efficient personal property securities regulatory system, which is essential for any modern financial system. These bills draw upon the New Zealand, Canadian and United States legislation. They also draw on work by United Nations Commission on International Trade Law and the International Institute for the Unification of Private Law.

These bills will also address the relationship between potentially conflicting Commonwealth, state and territory laws. These bills specify where other laws prevail. For example, these bills will not apply to tradeable water rights, water access entitlements, goods affixed to land or to non-consensual interests such as liens. Furthermore, a state or territory will be able to expressly exclude a right entitlement or authority granted by the law of the state or territory from application by these bills.

The various states and territories have long had their own mechanisms for the registration and management of securities given over personal property to secure financial obligations. Familiar examples include fixed and floating charges, bills of sale, chattel mortgages and registers of hire-purchase agreements. It has long been recognised that there is a need for national harmonisation of these forms of security to provide greater certainty for borrowers and lenders and to increase efficiency in the sector.

The matter of personal property securities reform was referred to the Australian Law Reform Commission as long ago as June 1990. Draft legislation informed by the ALRC’s report was prepared in 1995 and was itself the subject of extensive consultation. The matter was pursued through COAG, which in 2007 endorsed the model of a national system. The former Attorney-General, the Hon. Philip Ruddock, gave this issue particular priority. In October 2008 the members of COAG signed an intergovernmental agreement to effect the proposed legislation as part of the seamless national economy agreement between the Commonwealth, the states and the territories. New South Wales has passed its referral act and it is expected that the other jurisdictions will follow soon, the basis upon which the Commonwealth is legislating in this field being not a section 51 head of power but referral from the states.

The bills will apply with very limited exceptions to all types of personal property, including motor vehicles, contractual rights, intellectual property rights and un-certificated shares. They provide for the rules for the creation, priority and enforcement of security interests and the establishment of the national register of them. There are detailed specific provisions in relation to certain classes of property. As I said at the start, the brevity of the parliamentary debate on this issue should not conceal its commercial and legal consequence. This is a very, very exciting field for property lawyers many of whom will be waiting with bated breath for the passage of this legislation.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

Senator Mason interjecting—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Yes, they will be, Senator Mason, but you are not one of them! I conclude by acknowledging the work of the Senate Legal and Constitutional Affairs Committee, which reviewed both the substantive bill and the consequential provisions bill. I know that Senator Guy Barnett, the deputy chair of that committee, took a very close interest in this matter as did Senator Russell Trood who participated in the hearings of that committee. I wish to acknowledge their close interest in this highly technical but, from a mechanical and legal point of view, most consequential suite of bills which have the opposition’s support.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I thank senators for their contributions in the chamber and on the Senate Standing Committee on Legal and Constitutional Affairs. In doing so, I table a replacement explanatory memorandum relating to the Personal Property Securities Bill 2009.

Question agreed to.

Bills read a second time.