27 JUNE 2012
The resources sector is not immune from the effects of the PPSA. Joint venture parties may by entering into contractual arrangements and agreeing contractual entitlements, create a security interest where one did not previously exist.
Where a security interest is created, registration of the security interest on the Personal Property Security Register (PPSR) will provide all relevant protection for that interest.
A security interest may be created where, for example :
- A default provision in a joint venture agreement (JVA) entitles one party to purchase the others interest on default;
- A majority party, without a court order, may force the sale of a minority party’s interest in the JVA on the sale of their own;
- A deed of cross charge exists in relation to an interest in a JVA.
A power of attorney granted under the JVA allowing a party to sign documents on behalf of the other for those purposes may also be classified as a security interest.
JVA participants should be alert to the creation of security interests in existing and future documentation in relation to their projects and register the interest accordingly. However, due to the definition of ‘personal property’ in the legislation, mining and petroleum tenures should still be registered with the applicable State based authorities.
You are a valued Kinneally Miley contact, for more information related to this Legal Update please contact us.
[contactsbox] [leftcolumn]Contact Associate: Michael Coe
Direct Telephone : 07 3210 5709
Mobile Telephone : 0408 983 876
[email protected]