a security interest in collateral is not taken to have been continuously perfected under subsection (1) if, immediately before the collateral became located in Australia:
(a) in a case in which the law of the foreign jurisdiction provides for the perfection (and effect of perfection or non-perfection) of the security interest — the security interest was not perfected under that law; or
(b) in a case in which paragraph (a) does not apply to the law of the foreign jurisdiction, but that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest — the security interest, or such a notice, was not so registered or recorded.
Temporary perfection after move to Australia
(3) If a security interest in collateral is continuously perfected under subsection (1), the security interest in the collateral is temporarily perfected for the period:
(a) starting at the time the property becomes located in Australia; and
(b) ending at the earlier of the following times:
(i) the end of 56 days after the day the collateral becomes located in Australia;
(ii) the end of 5 business days after the day the secured party has actual knowledge that the collateral has become located in Australia.
(4) However, the security interest in the collateral becomes unperfected at the end of the period mentioned in subsection (3), and is taken never to have been temporarily perfected, unless the security interest is perfected otherwise than under subsection (3) before the end of the period.
40 Relocation — intangible property and financial property
Continuous perfection prior to relocation event
(1) If the law of a foreign jurisdiction has governed a security interest in intangible property, or financial property, the security interest is taken to have been continuously perfected for the period covered by subsection (2) if:
(a) either of the following events (the relocation event) occurs:
(i) the grantor becomes located in Australia;
(ii) the grantor transfers the collateral to a person who is located in Australia; and
(b) immediately before the relocation event, and at the time of that event:
(i) the security interest was effective; and
(ii) the security agreement providing for the security interest was enforceable against third parties; and
(c) as a result of the occurrence of the relocation event, the perfection (and the effect of perfection or non-perfection) of the security interest becomes governed by the law of Australia.
Note 1: For when bodies corporate, bodies politic or individuals are located in a jurisdiction, see section 235.
Note 2: For when laws of other jurisdictions govern a security interest, see Part 7.2.
(2) This subsection covers the period:
(a) starting at whichever of the following times is applicable:
(i) if the law of the foreign jurisdiction provides for the perfection (and the effect of perfection or non-perfection) of the security interest — when the security interest last became perfected under that law;
(ii) if subparagraph (i) does not apply to the law of the foreign jurisdiction, but that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest — when the security interest, or such a notice, was so registered or recorded (or was last so registered or recorded);
(iii) if neither subparagraph (i) nor (ii) applies to the law of the foreign jurisdiction — when the security interest last became enforceable against third parties under that law; and
(b) ending when the relocation event occurs.
(2A) However, a security interest is not taken to have been continuously perfected under subsection (1) if, immediately before the relocation event:
(a) in a case in which the law of the foreign jurisdiction provides for the perfection (and effect of perfection or non-perfection) of the security interest — the security interest was not perfected under that law; or
(b) in a case in which paragraph (a) does not apply to the law of the foreign jurisdiction, but that law provides for the public registration or recording of the security interest, or of a notice relating to the security interest — the security interest, or such a notice, was not so registered or recorded.
Temporary perfection after relocation event
(3) If a security interest in collateral is continuously perfected under subsection (1), the security interest in the collateral is temporarily perfected for the period:
(a) starting at the time of the relocation event; and
(b) ending at the earlier of the following times:
(i) the end of 56 days after the day of the relocation event;
(ii) the end of 5 business days after the day the secured party has actual knowledge of the relocation event.
(4) However, the security interest in the collateral becomes unperfected at the end of the period mentioned in subsection (3), and is taken never to have been temporarily perfected, unless the security interest is perfected otherwise than under subsection (3) before the end of the period.
Exceptions
(5) This section does not apply to:
(a) intellectual property, an intellectual property licence or an ADI account; or
(b) a negotiable instrument.
Note: The property mentioned in paragraph (5)(a) is intangible property; negotiable instruments are financial property (see section 10).
Part 2.5
Taking personal property free of security interests
41 Guide to this Part
This Part is about taking personal property free of security interests.
Rules are set out for when personal property may be bought or leased free of a security interest in relation to the following:
(a) unperfected security interests;
(b) serial number defects;
(c) motor vehicles;
(d) taking in the ordinary course of business;
(e) personal, domestic or household property;
(f) currency;
(g) taking investment instruments or intermediated securities in the ordinary course of trading;
(h) investment instruments;
(i) intermediated securities;
(j) temporarily perfected security interests.
If a transferee takes personal property (or an accession) free of a security interest by the operation of this Part, the secured party’s rights are subrogated to the rights of the transferor. Payment of the purchase price before the transferee receives notice of subrogation discharges the transferee’s obligation (to the extent of the payment).
42 Application of this Part
This Part:
(a) applies to a security interest:
(i) whether or not the security interest is perfected (except in sections 43 (unperfected interests) and 52 (temporarily perfected interests)); and
(ii) whether the security interest attaches to personal property as original collateral or as proceeds; and
(b) does not apply to the acquisition of an interest in personal property free of a security interest if the interest that