- 18.1 What is priority?
- 18.2 Priority rules under the PPSA
- 18.3 Priority waterfall - summary
- 18.4 First: payments to creditors - section 69
- 18.5 Second: general law liens and statutory liens and charges arising in the ordinary course of business - section 73
- 18.6 Third, takers of interests in negotiable instruments, chattel paper and negotiable documents of title – sections 70, 71 and 72
- 18.7 Fourth: control - section 57
- 18.8 Fifth – accounts – security interests over (future) accounts generated from sales of inventory, as original collateral and granted for new value – section 64
- 18.9 Sixth: “strong PMSIs” – section 63
- 18.10 Seventh: “normal” PMSIs – section 62
- 18.11 Eighth: perfected v’s perfected – earliest priority time wins – section 55(4)
- 18.12 Ninth: execution creditors may defeat unperfected security interests – section 74
- 18.13 Tenth: perfected v’s unperfected – perfected wins – section 55(3)
- 18.14 Eleventh: unperfected v’s unperfected – the first to attach wins outside of the grantor’s bankruptcy, administration or liquidation – section 55(2)
- 18.15 Priority waterfall diagram
- 18.16 Transfers of collateral
- 18.17 Security interests over ADI accounts
- 18.18 Tacking of further advances is permitted
- 18.19 Transitional security intersts – priority disputes
- 18.20 Knowledge and its diminished relevance to priority disputes
- 18.21 Accession, processing and commingling priority rules
- 18.22 Prioirity of security interests in agricultural interests
What are agricultural interests?
The PPSA establishes agriculture as a class of collateral. Security interests can be registered against agriculture. The principal agricultural products are livestock and crops.
Relationship of land to growing crops
The PPSA clarifies that security can be taken in land and crops separately. Are crops, while they are growing, part of the land on which they grow? This is a difficult point. The PPSA suggests that crops do not form part of the land given that a security interest can attach to crops while growing separately from the land on which they grow1.
Priority over crops
Security granted in crops while they are growing, or under a security agreement entered into not more than six months before crops are planted, to enable the crops to be produced, has priority over any other security interest granted by the same grantor in the crops or their proceeds4. This enables planting and harvest finance by giving “super priority” over crops.
Priority over livestock
Security granted in livestock or its proceeds (meat or wool) while the livestock are held, or under a security agreement entered into not more than six months before livestock are acquired, to enable the livestock to be fed or developed, has priority over any other security interest granted by the same grantor in the livestock or their proceeds except for PMSIs granted to acquire the livestock5. This facilitates stock-finance by enabling “super priority” over livestock, but not as against PMSIs granted to acquire the livestock.
