A pari passu agreement is a document which effectively deals with different security agreements that have may have been registered at different times, or are likely to be registered one after the other.

Given that the order of preference a creditor has is determined by the time a security interest is registered on the PPSR, a pari passu agreement can be entered into to ensure that where two creditors are registering one after the other in respect of a debtor, their rights between each other are maintained on an equal footing.

An example of this may be where a husband and wife both have a separate trust that will lend money to a company run jointly by them and they want to ensure that both of their trusts have the same security interest even though in terms of the registration of their respective General Security Agreements will occur consecutively, but one just before the other.