- 26.1 Accession, processing and commingling of goods
- 26.2 The difference between accession, commingling, processing and manufacture
- 26.3 Example of processing or manufacture by diagram
- 26.4 Accession of goods
- 26.5 Processing, comingling and manufacture of goods
- 26.6 Priority of competing security interests that each continue into the product or mass
- 26.7 Relationship between security interests over goods continuing into a product, and existing security interests that attach to the product
- 26.8 PMSIs continuing into product or mass retain their super priority
- 26.9 Proceeds of the product or mass
- 26.10 Identification of proceeds in ADI accounts
PMSIs that exist and are perfected over goods that become part of a product or mass retain their super-priority and defeat both:
(a) non-PMSI perfected security interests over other goods that also continue into the product/mass; and
(b) any non-PMSI perfected security interests that attach to the product or mass itself, such as all- assets or future property security interests granted by the owner of the product or mass and which attach to the product or mass upon creation1.
In the above example, the retention of title security interest held by the paint supplier is a PMSI. It will retain its PMSI super priority status over the car when the paint becomes part of the car.
Even if the general (all-assets) security interest of Bank A is registered and has a priority time before the security interest of the paint supplier, the paint supplier should still win in relation to the car, relying on its PMSI super priority.
The super-priority of PMSIs (such as the paint supplier) in relation to products or mass will be limited to the value of the PMSI collateral on the day it becomes part of the product or mass.
Notes:
1 PPSA section 103 (link)
