Problem Question:

Sam runs a delivery business. It started with just Sam and one van. Sam wants to expand the business so he approaches Product Finance Ltd who enters into a security agreement with Sam to finance the purchase of 50 vans. Product Finance then registers the security agreement on the PPSR. This goes well and Sam's business starts to boom. But, he is running low on cash to pay his employees and keep the vans maintained. He approaches Small Loans who agree to advance Sam some cash with the condition that if Sam fails to repay, he agrees to give Small Loans enough vans to cover the remaining debt. Small Loans doesn't bother to register the agreement. During a COVID lockdown, Sam gets an increased amount of demand for deliveries. Expecting this increase to be short-term, Sam decides to hire more employees to drive the vans so he can run the business for longer hours. He uses the remaining equity in the vans to enter into a security agreement with Mega Bank. Mega Bank registers their interest on the PPSR.

Unfortunately, Sam falls down the stairs, breaking his arms and leg. He leaves his business to be run by his cousin Steve. Sam returns to the business after a few months spent in recovery. When he reviews the books for the business, he finds that Steve has defaulted on the business loans, lost an important ongoing contract with a customer and to top it off, it looks like Steve has been using company funds for lavish 'business dinners.' Sam has no choice but to declare bankruptcy.

What is the order of priority for each secured party in the vans? Make specific reference to the PPSA in your response (you do not need to consider Bankruptcy laws).