Since the commencement of the PPSR, retention of title clauses are ineffective against the interests of a registered creditor or a liquidator, unless the supplier’s continuing interest in goods supplied is registered. If the supplier fails to register their interest then they will at best be considered an unsecured creditor in the event that the purchaser goes into liquidation or bankruptcy.
Security interests under retention of title and leasing agreements are capable of being registered (and should be) as ‘Purchase Money Security Interests’ (PMSIs). The major benefit of a PMSI is that, if registered correctly, the PMSI takes priority over all other security interests (registered and unregistered) in the same collateral notwithstanding that some of the other registrations may be earlier in time. This priority survives the purchaser going into liquidation or becoming insolvent. It therefore makes it easier for the supplier to prove their interest as against any liquidator or trustee.