The Personal Property Securities Act 2009 (Cth) (PPSA) came into force in 2012. It affects artists whose artworks is placed on consignment with art galleries.
Prior to this change in the law, an artist whose work was on consignment with a gallery could assert their property ownership rights if the gallery went into
liquidation and regain possession provided that consignment could be proved. The
most common way was through a consignment agreement signed by both parties. If
the artwork had been sold but payment not received prior to liquidation,
payment to the artist would be prioritised out of the gallery's assets.
Now, if the artist has registered the gallery on the Personal Property Securities Register (PPSR), the artworks will have the highest priority in the case of gallery bankruptcy and be returned to the artist. However, in the case of liquidation if the artist has not registered, the artworks on consignment will be dealt with as security interests and used to secure the gallery's debts. The existence of consignment agreements will be irrelevant if the artist has not registered.