The Concept of a Security Interest: The Canadian Experience

The Australian Personal Property Securities Act is expected to come into force on October 31, 2011. The paper discusses the unitary concept of a security interest and the "substance" test that is used to determine if a transaction constitutes a security interest. It then looks at the Canadian experience with these concepts with particular emphasis on the treatment of the floating charge and flawed asset arrangements. The paper then examines legislative differences in order to determine the extent to which the Canadian cases may be of assistance to Australian courts and lawyers.