What’s yours is mine: attachment of security interests to third party assets

Mike Gedye, New Zealand Business Law Quarterly, Volume 10 Number 3 September 2004

This article considers the case of Graham v Portacom New Zealand Limited1, which was summarised in the Autumn 2004 issue of Financial Services Quarterly.

In his article, Mike Gedye demonstrates his support for the decision, noting:

• The common law principle of nemo dat (which basically says that you can only give as good an interest in property as you have) has been substantially affected by the Personal Property Securities Act 1999 (the PPSA) and simply does not apply in the context of priority competitions that are regulated by the PPSA.
  
  
• Security agreements need not be changed to cover assets not owned by the debtor – the re-characterisation of notions of ownership in the PPSA is sufficient (although Mr Gedye does set out some suggested wording covering property in which the debtor has rights but does not own).
  
  
• One of the objectives of the PPSA was to increase commercial certainty in secured lending by implementing clear priority rules, even though these may sometimes produce unfair results.

1 [2004] 2 NZLR 528

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