5. RETENTION OF TITLE
5.1 Interpretation(1) In the Terms and Conditions, PPSA means Personal Property Securities Act 2009 (Cth), as amended from time to time.(2) A term that is used in italics in this Section 5 has the same meaning as in the PPSA.(3) In the Terms and Conditions Insolvency Event means the happening of any of these events in relation to a party (Defaulting Party): (a) the Defaulting Party enters into a scheme or compromise with its creditors;(b) the Defaulting Party suspends payment of its debts;(c) where the Defaulting Party is a body corporate;
(i) the Defaulting Party becomes an externally-administered body corporate under the Corporations Act 2001;
(ii) steps are taken by any person towards making the Defaulting Party an externally-administered body corporate (but not where the steps taken consist of making an application to a court and the application is withdrawn or dismissed within 14 days);(iii) a controller (as defined in section 9 of the Corporations Act 2001) is appointed to any of the property of the Defaulting Party or any steps are taken for the appointment of a controller (but not where the steps taken are reversed or abandoned within 14 days);(iv) the Defaulting Party is taken to have failed to comply with a statutory demand within the meaning of section 459F of the Corporations Act 2001; or(v) a resolution is passed for the reduction of capital of the Defaulting Party or notice of intention to propose such a resolution is given, without the prior written consent of the other party; or (d) an event happens analogous to an event specified in Sections 5.1(3)(a) to 5.1(3)(c) to which the law of another jurisdiction applies and the event has an effect in that jurisdiction similar to the effect which the event would have had if the law of Australia applied.
5.2 When property passes
Property in the Products supplied by Philips to the Buyer does not pass to the Buyer until:(1) the money owing for those Products; and(2) any other money owing by the Buyer to Philips,has been paid (whether or not the Products are delivered at different times, are the subject of separate invoices or, after delivery, may be determined by Philips to be the subject of a specific invoice).
5.3 Rights of the Buyer
Until the Products have been paid for in full, the Buyer:(1) must properly store, protect and insure the Products including storing them separately and in a manner that clearly identifies them as the property of Philips;(2) must not sell the Products, other than in the ordinary course of its business; and(3) must not sell, assign, charge or otherwise encumber or grant any interest over any debts and other obligations which any third party may owe to the Buyer as a result of the use, manufacture or resale of the Products.Nothing in this Section 5 limits or excludes Philips’ interest as principal in those debts and other obligations.
5.4 Sale of the Products
If the Buyer sells any of the Products while they remain the property of Philips, and receives proceeds of the sale or receives any other proceeds, whether tangible or intangible, direct or indirect, of any dealing with the Products (including any proceeds from insurance claims) the Buyer grants to Philips a security interest in every payment to the Buyer for the Products (both as proceeds of the Products and as original collateral).
5.5 Use of Products in manufacture
If the Buyer uses any of the Products in a manufacturing or construction process of its own or a third party and sells the product of the manufacturing or construction process, then the Buyer grants to Philips a security interest in that portion of every payment to the Buyer for the manufactured product that relates to any Products sold to the Buyer and which are used in the manufacturing and construction process (both as proceeds of the Products and as original collateral).
5.6 Balance sale price remains a debt
If the sale price of all Products sold to the Buyer is greater than the sum of all payments actually received by Philips in respect of the Products, the difference remains a debt owing by the Buyer to Philips.
5.7 Allocation of payments from the Buyer to Philips
(1) Until the Products have been paid for in full and any other money owing by the Buyer to Philips has been repaid, every payment by the Buyer to Philips must be taken to be a payment:(a) firstly, of any amount owed by the Buyer to Philips that is not subject to a security interest;(b) secondly, of any amount owed by the Buyer to Philips that is subject to a security interest, to the extent that the security interest is not a purchase money security interest; and(c) thirdly, of any amount owed by the Buyer to Philips that is subject to a security interest, to the extent that it is a purchase money security interest.(2) An ordinary acknowledgment by Philips to the Buyer that an invoice has been paid is not, and must not be treated as, an agreement by Philips to amend the order of priority set out in Section 5.7(1).
5.8 Insolvency of the Buyer
If the Buyer suffers an Insolvency Event, without prejudice to any other rights of Philips:(1) the Buyer’s right to sell the Products in the ordinary course of business and any other rights of the Buyer in respect of the Products immediately cease; and(2) the Buyer must immediately return to Philips the Products in which title has not passed.
5.9 Philips’ authority to inspect and reclaim
(1) The Buyer irrevocably authorises Philips (or its representative) at any time, to enter any premises upon which the Products are stored to enable Philips to inspect the Products (including any records pertaining to the Products) and, if the Buyer has breached the Terms and Conditions (including but not limited to its payment obligations towards Philips), gives reason to believe that it will not fulfil any or part of its payment obligations or suffers an Insolvency Event, to reclaim possession of the Products. The Buyer agrees to fully cooperate with Philips in order to enable Philips (or its representative) to reclaim possession of the Products.(2) If Philips enters any premises for the purpose of reclaiming possession of the Products, and incurs any liability to any person in connection with the entry or reclamation, the Buyer indemnifies Philips against that liability.
5.10 Products attached to premises or joined to another product
(1) If any of the Products have been joined to another product, then in taking possession, Philips must, where it is possible to do so, remove the product that was not supplied by Philips or in which title has passed to the Buyer. To the extent it is unable to remove the other product, Philips’ property in the Products is not affected by their ongoing connection to that other product.(2) Philips’ property in the Products is not affected by the fact that the Products become fixtures attached to premises of the Buyer or a third party.
5.11 Products supplied on credit
(1) The provisions of this Section 5 apply despite any arrangement between the parties under which Philips grants the Buyer credit. Where Philips grants the Buyer credit for a specific period, the credit period is for that period or until the resale of the Products by the Buyer or their use by theBuyer in a manufacturing or construction process of its own or a third party, whichever is the earlier.(2) Philips may commence legal action against the Buyer if the Products are not paid for within the Philips’ usual credit terms or any separate arrangement for credit made by Philips with the Buyer although property in the Products has not passed to the Buyer.
If at any time Philips retains legal title to the Products as contemplated by this Section 5, the Buyer acknowledges and agrees that:(1) the Terms and Conditions are a security agreement;(2) this Section 5 creates a security interest in all present and after acquired Products and any proceeds as security for the Buyer’s obligations to Philips;(3) Philips is a secured party in relation to the Products and any proceeds of the Products, and is entitled to register its interest on the register as a:(a) security interest; and(b) if applicable, a purchase money security interest, at the discretion of Philips;(4) Philips may, by notice to the Buyer, require the Buyer to take all steps that Philips considers necessary or desirable to ensure its security interest in the Products and the proceeds is enforceable, and to perfect, or better secure the position of Philips under the Terms and Conditions;(5) the Buyer must comply with a notice from Philips under this Section 5 at the cost and expense of the Buyer;(6) the Buyer must promptly inform Philips of any change to information that it provides to Philips under this Section 5;(7) Philips is not obliged to give any notice, document or information under the PPSA, including, but not limited to:(a) notice of removal of accession under section 95 of the PPSA;(b) notice of enforcement of liquid assets under section 121(4) of the PPSA;(c) notice of disposal of collateral under section 130 of the PPSA;(d) a statement of account after disposal of collateral containing the information in section 132(3)(d) of the PPSA;(e) a statement of account under section 132(4) of the PPSA;(f) notice of retention of collateral under section 135 of the PPSA; and(g) notice of a verification statement under section 157 of the PPSA, unless the provision of the notice, document or information is required by the PPSA and cannot be excluded; and(8) the Buyer consents to the waiver of the requirement for notice, copies of documents or information under Section 5.12(7).
(1) Subject to Section 5.13(2), neither party may disclose any information or documents supplied by another party that is not publically available, including:(a) information of a kind referred to in section 275(1) of the PPSA; or(b) the existence or content of the Terms and Conditions.(2) A party may disclose information or documents as follows:(a) in the case of Philips, in assigning or enforcing or seeking to assign or enforce this Section 5 or in a proceeding arising out of or in connection with the Terms and Conditions or to the extent that disclosure is regarded by Philips as necessary to protect its interests;(b) if required under a binding order of a government agency or any procedure for discovery in any proceedings;(c) if required under any law or any administrative guideline, directive, request or policy whether or not having the force of law and, if not having the force of law, the observance of which is in accordance with the practice of responsible bankers or financial institutions similarly situated;(d) as required or permitted by the Terms and Conditions;(e) to its legal advisers and its consultants; or(f) with the prior consent of the other party, which must not be unreasonably withheld.(3) Each party consents to any disclosure of information or documents made in accordance with Section 5.13(2).(4) Section 5.13(2)(c) does not require Philips to disclose any information of the kind referred to in section 275(1) of the PPSA.(5) This Section 5.13 survives the termination of any Agreement.
Nothing in this Section 5 is intended as an agreement to subordinate a security interest arising under the Terms and Conditions in favour of any person under section 61 of the PPSA or to limit any right of Philips under section 53 of the PPSA.