Adrian is a chef from New Zealand and has recently moved to Melbourne. He is keen to open up a Caf in St Kilda. He finds a great premise to lease on the Beach road. He signs a lease with the property owner, Normann. Adrian can't afford to buy the kitchen equipment outright so he gets a loan from JKN Bank for $100,000. A term of the loan agreement was to register the equipment on the Personal Property Security Act. Using the money borrowed, Adrian opens the caf but it doesn't do well. After a few weeks, he is unable to keep up the payments to Normann, JKN Bank and other suppliers. After another month of not receiving his rent, Normann changes the locks on the premises and says that until his rent is paid in full, he has complete ownership and interest of everything inside. Advise JKN Bank on what their position is in regards to their interest in the kitchen equipment versus Normann's.

ISSUE

(explain what is the legal question raised by the question)

RULE

1. Explain how the PPSA govern the creation and enforcement of security interests over personal property. - background to PPSA : history, objectives

- who are the parties? grantor, secured party

- what are the categories of collateral?

- what is personal property?

- what is security intrest? 2. Explain how to MAKE and enforce a security interest under PPSA - what is a security agreement?

- what is attachment?

- what is enforcement against 3rd parties?

- what is perfection?

> perfection by possession

> perfection by control

> perfection by registration

- what is PPS Register? - what are the steps to registration?

3. Explain the priority rules clearly 4. Explain relevant case law (if any) to identify how the courts have dealt with unresolved questions after the enactment of PPSA eg: right to entry for repossession 5. Discuss briefly how the PPSA balances the different interests of debtors and creditors, and the competing interests of creditors, and place this in the broader economic context.

ANALYSIS - Analyse the facts carefully from a legal perspective

- identify who are the parties clearly and the nature of the disput - explain what type of security does the bank have against borrower - explain what actions the bank should do to secure their lending - assuming the bank have done so, what legal rights does the bank have against the borrower's asset? - can the owner stop the bank from entering the premises to repossess the asset?

CONCLUSION - what are the chances of success of the bank being able to recover money owed? Why or why not?