Recent CAFBA Bulletins have dealt with case studies involving a motor vehicle, describing it as a type of ‘serial numbered good’, as it is generally described in the context of the Personal Property Securities Act 2009 (PPSA), although the Act does not define that term. However, under the PPSA, not all goods with a serial number are, or can be, registered as serial numbered goods. This Bulletin deals with what are serial numbered goods and some key implications of that concept arising from registering on, and searching of, the Personal Property Securities Register (PPSR).
Serial Numbered Goods
Not all goods/equipment with a serial number can be registered or searched on the PPSR by that number. There are only 3 types of serial numbered good for PPSA purposes –
Each has its own technical and complex definition, with various terms within each definition often also defined – these are found in the Personal Property Securities Regulations 2010.
All other goods which do not fall within those definitions are simply regarded as ‘other goods’, meaning their serial number is irrelevant – registration and searching is on the name of the grantor (customer).
For present purposes, below is a high-level summary of each type of PPSA serial numbered good.
A motor vehicle is any equipment which does not run of rails, tram lines or similar and which:
This covers all manner of transport vehicles, e.g. sedans, motor bikes, utes, SUVs, trucks, trailers, caravans etc, as well as types of agricultural and construction equipment, whether capable of being driven or being towed by another vehicle.
Inevitably, it is the combined speed and power criteria which determines what is a motor vehicle or whether it can be towed. For instance, some motorised equipment, such as scissor lifts, may not be regarded as a motor vehicle, but a bulldozer, harvester, road grader, might be a motor vehicle – each ‘vehicle’ needs to be assessed according to both their speed capability and motorised power, or whether they can be towed by another motor vehicle.
A watercraft is a boat or vessel which:
This covers both powered and non-powered watercraft, e.g. ships, sailing boats, powered boats (whether powered by inboard or outboard motors), barges (whether powered or towed). Please be aware, outboard motors themselves are not within the watercraft definition and cannot be registered by serial number, even though the boat can be.
An aircraft is equipment that:
Significantly, this covers not only all sorts of flying machines, so long as appropriately registered, but also specific parts, i.e. engine and airframe.
Key PPS implications
Whether goods are regarded for PPSA purposes as serial numbered goods is crucial to the management of PPSA risk. It ensures effective PPSR registration by allowing others to search and identify the serial numbered goods to avoid a person buying secured goods free of the security rights. These ‘taking free’ circumstances were discussed in the July 2020 CAFBA bulletin in the context of a broker involved in arranging for a client the private sale of a secured motor vehicle.
Member Relevance & Practical examples
There will be times when secured parties (financiers) ask for brokers and other intermediaries (e.g. dealers) to confirm these requirements and the identity of secured goods/equipment if possible. Also, if private transactions, refinancings or sale and leasebacks of serial numbered goods are involved, brokers will wish to ensure their searching of the PPSR is based on the correct type of serial number for the particular type of good.
Taking these requirements and applying them to some common types of situations will provide a perspective on what serial number requirements are to be met. The following table provides guidance on goods types, their serial numbers, where relevant, and their corresponding collateral classes.
|Goods – Examples||Collateral Class & Serial number|
|Truck, car, ute. SUV, motor bike||Motor Vehicle & VIN|
|Trailer, caravan||Motor Vehicle & VIN|
|Tractor, ride-on-mower, ATV||Motor Vehicle & VIN, but if no VIN, then chassis number, and if neither, manufacturer’s number|
|Boat, trailer, outboard engine combo||
|Ship||Watercraft & Shipping Registration official number|
|Small aircraft||Aircraft & Nationality and Chicago Convention registration marks|
CreditWise, 24 August 2020