Bruce lives in the back of his shop in western New South Wales, where he makes and sells boomerangs. He bought the shop and residence about 10 years ago using funds borrowed from his local bank, ABC Bank, and the Bank secured the loan with a mortgage over Bruce's place. Bruce was making regular repayments on his housing loan until 24 months ago, and although he has tried to catch up he has run short of funds again due to the slow payment for 1000 boomerangs worth $200,000 that he sent to Sydney. Bruce also leases a computer and photocopier from Office Equipment to help run his business. To try and cover his expenses until the $200,000 that he is owed is paid, Bruce took out a short term loan with Friendly Finance, which registered a security interest over all of Bruce's assets. Unfortunately Bruce has now missed a number of payments to Friendly Finance for the short term loan, to Office Equipment for the lease of the computer and photocopier, and to ABC Bank for his home loan. Friendly Finance is no longer being very friendly and has warned Bruce that it plans to act very soon on its security.

1. Can Friendly Finance foreclose, take possession of and sell Bruce's shop and residence to repay the short term loan? What type of interest do ABC Bank and Friendly Finance each have over the premises where Bruce lives and works? Would it make a difference if Bruce had given his certificate of title to Friendly Finance when he took out the short term loan?

2. Can Friendly Finance sell Bruce's computer and photocopier? What type of interest do Office Equipment and Friendly Finance each have over the office equipment that Bruce has leased?

3. If Office Equipment had sold rather than leased the computer and photocopier to Bruce, and the sale had been made using funds borrowed from Office Equipment and secured by a PMSI, would this change the situation for Office Equipment, and why?