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enforceability of security interests in personal property and the determination of
priority between security interests in the same property. Prior to the passing of the
Act, the question of priority is determined by a complex relationship between
common law, equitable priority rules and the statute. 112
The Act also provides a searchable register, called Personal Property Securities
Register, in order to perfect the security. The existence of this register provides for
simple and cheaper avenue for creditors to know their priority and their position in
relation to the security. The Companies (Amendments) Act 2006 also attempts to
give solutions to the conflict of priority under PPSA and schedule 7 of the
Companies Act 1993. 113
The formation of Malaysia in 1963 and the growth of commercial activities,
prompted the need to review the existing legislation and to have uniform companies
legislation throughout Malaysia. As a result, the Ministry of Commerce and Industry
set up a committee on 30 th October 1963 chaired by Raja Mohar bin Raja
Badiozaman (the committee is also known as the Mohar Committee) to recommend
the new Companies legislation in Malaysia. 114 In recommending the new legislation,
the Committee considered legislation in force at the time in England, Australia, India
and New Zealand.
In addition, references were also made to the Cohen Report, the Jenkins Report, the
report and draft code for Ghana prepared by Gower, as well as various comments
112 Farrar, Ibid at [25.1]
113 Schedule 7, para 2(1) (b)(i)(B) of the New Zealand Companies Act 1993 as inserted by Schedule 1
of the Companies (Amendments) Act 2006 provides that the preferential claims listed in schedule 7
will have priority over the claims of any person under the security interest over accounts receivable
and inventory which is not a purchase money security interests that has been perfected at the time
specified in section 74 of the Personal Property Securities Act 1999. See also Schedule 7 para 2(1)
(C) of the same Act.
114 Malaysia Parliamentary Debates above n70 at 768.
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