For background and to better explain what attachment means, the PPSA has three levels of rules about security interests coming into existence and their enforceability, as follows:

First, the rules about when security interests arise as between the grantor and the secured party, which are referred to as the rules on attachment of security interests;

Second, there are rules about when an attached security interest is enforceable against third parties other than the grantor. This step requires there to be a security agreement or writing that evidences a security interest, which adequately describes the collateral covered by the security interest, or the secured party to take possession or control of the collateral, so everyone knows what property the security interest covers¹. The PPSA describes this step as making a security interest enforceable against third parties; and

Third, there are rules about how to “advertise” (perfect) security interests in collateral that have attached and which are enforceable against third parties. The PPSA describes these rules collectively as perfection. Perfection gives a priority time with which to compete against other security interests or other interests granted in the same collateral.

Perfected security interests are given strength to compete against other security interests in the same collateral because once perfected, security interests should be advertised so that others either know or can find out about them before they take an interest in the collateral.

Secured parties can perfect their security interests by registration, taking possession or control of the collateral, or relying on temporary perfection in some cases.

The email attachment “paperclip” icon below symbolises the attachment of security interests to collateral under the PPSA. A security interest attaching to, and so gripping, personal property can be likened to attaching a document or item to an email.

Perfection of a security interest makes it as strong as it can be in competitions with others who also have an interest in the same collateral, so these steps are grouped together and referred to as “perfecting” security interests. By contrast, attachment brings about a security interest between the grantor and the secured party, though an attached security interest can be enforced against another attached but unperfected security interest in the same collateral².

When assessing any security interest for its enforceability, each of these three aspects must be considered and checked-off, being:

1. attachment
2. enforceability against third parties (security agreement or writing that adequately describes the collateral, or possession/control of the collateral by the secured party), and
3. perfection