Case examples

Everyday examples of how the PPSR may help you.

The following case examples may help you to understand the benefits of using the PPSR, and how the process works. These examples are illustrative only, and are not based on specific cases.

A company leases out a vehicle to a retail business

Useful Utes Ltd leases a delivery van to Cater-4-U Ltd for a period of two years. Both parties sign the lease. Before delivering the vehicle, Useful Utes registers a financing statement on the PPSR.

Six months later, Cater-4-U gets into financial difficulty and is placed into liquidation. Useful Utes gets its van back, but those creditors who didn’t register their interests on the PPSR are forced to wait in line, and may only get back a small portion of what they are owed.

A hobby farmer looks to buy livestock

Semi-retired Bruce is interested in buying a herd of alpacas he’s seen advertised by local farmer Tom Brown.

He learns that the farm is run through a company, Greengrass Ltd. Having obtained the company’s New Zealand Business Number (NZBN), he searches the PPSR for any registered interests, and finds one entry – for a motor vehicle. No security interest has been registered against the alpacas, however.

Satisfied that there is no debt attached to the livestock, Bruce is happy to proceed with the purchase.

A boatbuilder supplies property on ‘retention of title’ terms

Bonanza Boats Ltd creates luxury yachts to order for wealthy clients.

The company agrees to design and build a sleek, 60-foot cruiser for Roger, a successful entrepreneur. It is sold on the company’s standard terms, which require a deposit of 20 per cent, with the balance to be paid within 60 days of delivery.

The agreement includes a retention-of-title clause that states ‘until full and final payment is made, title remains with Bonanza Boats’.

Before the boat is completed, Bonanza Boats registers its security interest on the PPSR by completing a financing statement.

When Roger fails to make full payment for the vessel by the due date, registration on the PPSR allows the company to repossess the yacht without a hitch.

An artist sells her work on consignment

Jewellery designer Alison has for many years sold her work through a local gallery, run by sole-trader Michael.

As per the terms of the agreement, Michael sells Alison’s designs on consignment for a commission of 15 percent.

Recently, fellow artist Jonathan had suggested to Alison that she might want to register the arrangement she has with Michael on the PPSR.

Jonathan had lost some of his work the previous year when the owner of a gallery with which he’d had a similar agreement went into liquidation, and sold all the stock in his possession.

He now makes sure he is protected by registering security interests for all his artworks on the PPSR.

A supply company leases out heavy-duty office equipment

PrintWorks, a company offering commercial printing and copying services, arranges to lease a multi-function industrial printer from specialist manufacturer and supplier, Ink International, for a period of two years.

Before making the delivery, Ink International registers a financing statement on the PPSR. The following month, it also supplies a heavy-duty laminator on the same terms and conditions, which is added to the financing statement.

A year later, however, PrintWorks is in financial strife and its bank appoints receivers to enforce its security interest.

Despite this, Ink International is able to repossess its printer and laminator, its registration on the PPSR giving it priority in regards to the leased equipment.

A tradie buys a second-hand vehicle

Sparky Jed is starting up on his own, and is shopping for a low-mileage van to get his business moving.

Having seen the perfect vehicle being sold privately for a very reasonable price, he eagerly stumps up the cash.

He’s soon busier than he could have imagined, but work comes to a grinding halt when three weeks later his new vehicle is repossessed to pay the previous owner’s outstanding debts.

Jed is out of pocket and seriously inconvenienced, but could have avoided the pitfall had he searched the PPSR before buying the van to see if there were any security interests registered on the vehicle.