Romalpa suppliers and the PPSA - for better or worse in insolvency - Part II

Romalpa clauses, more commonly known as retention of title clauses, are designed to maximise the return to a seller of goods in a buyer's insolvency. This is achieved by the retention of title in goods and its concomitant benefits, including proprietary tracing rights to derivative proceeds exercisable outside of a buyer's insolvency. The Personal Property Securities Act 2009 (Cth) now regulates retention of title transactions over personal property within the context of "conditional sale agreements". Title is insignificant as retention of title interests are categorised as security interests under the Personal Property Securities Act 2009 (Cth). The statutory relegation of title to a security interest is examined in this two-part journal publication. Part I reviews the operation of the Romalpa clause, the registration process and recovery. The prevalent theme is that the Personal Property Securities Act 2009 (Cth) is more favourable to retention of title sellers than the law it replaces.