Using PPSR and Retention of Title

The scenario

You sold goods to a business on credit. Your terms of trade include a retention-of-title clause — the goods remain yours until you are paid in full. The customer has now defaulted, and you want to recover either the goods or your money ahead of everyone else. The clause is in your terms, but the real question is whether you took the further step of registering your interest on the Personal Property Securities Register (PPSR), because in practice that is often what determines whether the clause is worth anything.

This is one of the most valuable protections a goods supplier can have — and one of the most commonly mishandled, because a great clause that was never properly registered can leave you no better off than an unsecured creditor.

What's really going on

A retention-of-title clause says you keep ownership of the goods until paid. On its own, however, the clause can be fragile if the customer becomes insolvent, because an unregistered security interest may not be effective against an administrator or liquidator. The PPSR is the register where you record (and 'perfect') that interest, broadly giving you priority over later or unregistered claims and a much stronger position if the customer fails.

The catch is in the detail: registration generally needs to be done correctly and in time, against the right entity, and certain interests (like a purchase-money security interest in goods you supplied) can carry special priority if perfected properly. Get the timing or the details wrong and the protection can fail. So the practical issue is rarely whether you have a clause — it is whether you registered it, correctly, when you should have.

Your options

• Check your registration. Confirm whether you registered the interest on the PPSR, against the correct entity, and that it is current.
• Assess perfection and priority. Work out, with advice, whether your interest is perfected and where it ranks.
• Locate the goods. Retention of title is strongest while the goods still exist and are identifiable.
• Assert your interest promptly. If the customer is failing, move quickly — secured positions are time-sensitive.
• Get specialist advice. PPSR rules are technical; a registration error can cost you the priority entirely.

Recommended approach

Start by checking whether you actually registered your interest on the PPSR — and whether you did it correctly, against the right entity, and in time. A retention-of-title clause that was properly perfected can put you well ahead of unsecured creditors and may let you recover the goods themselves; the same clause unregistered can leave you in the general queue. If the customer is heading toward insolvency, this assessment is urgent, because priority and perfection are time-sensitive and an administrator may be appointed at any point.

Given how technical the rules are, treat PPSR and retention of title as an area for specialist advice rather than guesswork — a registration mistake can quietly destroy the protection. You can refer the matter with your terms of trade and any registration details so your position can be assessed, and the Academy lesson library explains how security fits into credit risk in plain English.

What to avoid

Do not assume a retention-of-title clause protects you if it was never registered — an unregistered interest can fail against an administrator or liquidator, leaving you unsecured. Avoid registering carelessly: errors in timing, the entity, or the details can undermine priority, so accuracy matters as much as doing it at all. Never delay asserting a secured position when a customer is failing — these rights are time-sensitive. This is general guidance, not legal advice. PPSR is a technical area where mistakes are costly, so obtain specialist advice on registration, perfection and priority.