A Queensland construction company has lost two large vehicles to the creditors of a company to which it was leasing the vehicles. The fate of the vehicles was decided by a judge in the Supreme Court of New South Wales last month in the first case to rule on aspects of the Personal Property Securities Act.The case highlights the problems that companies can run into if they do not register their security interests with the Personal Property Securities Register.Under the old law, when a company sold goods on the basis that title did not pass to the buyer until payment was completed the vendor retained title until that payment was completed.However, under the PPSA, which came into operation last year, the vendor must now register its security interest with the PPSR. Under the PPSA, if the security interest is not registered and the buyer becomes insolvent the vendor does not have title and the goods pass into the hands of the receiver or liquidator. This is what has happened to Queensland Excavation Services.QES bought three construction vehicles from Hastings Deering in 2010.  The purchases were paid for with finance from Esanda and Westpac.Shortly after that, QES leased the vehicles to another construction company, Maiden Civil, which was doing work at a number of sites around Alice Springs.QES took deposits from Maiden Civil for the vehicles and continued to invoice Maiden for amounts that corresponded to its finance charges for the vehicles.In March 2012, Maiden approached a finance broker looking for a loan. Security for the $250,000 loan included the vehicles.By July of that year, Maiden was in default on its loan and later the same month receivers were appointed to the company. The receivers claimed possession of the vehicles.The court had to decide which company owned the vehicles. Maiden had completed payment for one of them, so it was found to be the owner. QES was the owner of the other two.The court then had to decide which company had the superior interest over the two vehicles that QES owned: QES itself or Maiden's creditors.The court found that QES had not registered its interest on the Personal Property Securities Register, so Maiden's creditors had the right to take the vehicles.The court said the dispute was one of priority of security interests and not title to the collateral.A partner at Gadens Lawyers, Paul Armstrong, said the case demonstrated how the PPSA could adversely impact on owners and financiers of assets.Armstrong said: "This case reinforces why owners or financiers of assets need to register their interests on the PPSR at the time they part with [them]."