- 22.1 Registration
- 22.2 20 business day registration window – Corporations Act 2001 (Cth) section 588FL
- 22.3 Financing statements
- 22.4 The PPS Register is a “red flag” only – there is no “title by registration”
- 22.5 Requesting copies of security agreements
- 22.6 Financing change statements
- 22.7 Removal of pre-registrations where no security interest was ultimately taken
- 22.8 Registration by class of collateral
- 22.9 Registration against proceeds
- 22.10 Periods of registration – seven (7) years, 25 years or an indefinite period
- 22.11 Registration is only effective from the time the register shows the interest – so “search, register, search”
- 22.12 Verification statements
- 22.13 Search results - establishes registration time and priority time
- 22.14 Registration of PMSIs
- 22.15 Pre-registration before security interests attach
- 22.16 Inventory PMSIs must be pre-registered
- 22.17 "Silent equipment PMSI" risk
- 22.18 Amendment demands and amendment notices – cleaning up a cluttered register
- 22.19 Defective registrations
- 22.20 Other defects in registrations – PMSIs and “seriously misleading” registrations
- 22.21 Consequences of defective registrations
- 22.22 Registration, searches and privacy
- 22.23 Prescribed information, and prohibited registrations – impounded motor vehicles, proceeds of crime, freezing orders
- 22.24 Registration details for trusts
- 22.25 Applications for extension of time
A financing statement for a PMSI must state that the security interest is a PMSI. If the security interest is not a PMSI when it claims to be, the registration is defective1. Interestingly, if a security interest is a PMSI but the registration to perfect it does not state that it is a PMSI, the PPSA is silent on the consequences. It seems arguable that the registration remains effective, but the security interest loses its PMSI super priority status.
Registrations can be defective on other grounds, such as them being “seriously misleading”2.
Seriously misleading registrations - registration against the ABN instead of the ACN - sections 164 and 165
The matter of whether a PPSR registration made against a corporate grantor’s ABN instead of its ACN will be seriously misleading under PPSA sections 164 and 165, and therefore defective and not valid to perfect the security interests in question, was considered in In re Onesteel Manufacturing Pty Ltd [2017] NSWSC 21 (Onesteel).
This issue often arises in conjunction with vesting upon the grantor entering administration or liquidation, given that unperfected security interests (which include those not properly registered due to defective registrations) will vest in the grantor.
Crucial is that where PPSR registrations are made against the ABN of a corporate grantor, then a search of PPSR against the ACN only of that company will not reveal the registrations to the searcher. If the searcher cannot find registrations upon a due search, this tells heavily against the validity of the registrations.
The court in Onesteel held that PPSR registrations made against the ABN of a corporate grantor and not its ACN, are defective under sections 164 and 165, and therefore do not operate to perfect security interests. Accordingly, security interests would vest in the grantor upon the grantor entering administration or liquidation.
New Zealand case law has held that merely registering wide, for example, against all present and after-acquired property, when the secured party only has security over certain items or classes of property of a grantor, is not necessarily a seriously misleading registration3.
It remains to be seen what approach Australian courts will take to overly wide registrations, and whether they are judged to be seriously misleading or not.
Notes:
1 PPSA section 165(c)
2 PPSA section 164
3 Simpson v New Zealand Associated Refrigerated Food Distributors Ltd (Court of Appeal) [2007] 2 NZLR 130.
