A recent decision of the NSW Supreme Court highlights the dangers of registering incorrectly on the Personal Property Securities Register (PPSR).
A leasing company (Alleasing Pty Ltd) leased equipment to another company (OneSteel Manufacturing Pty Limited).
The lease agreement gave Alleasing the right to register a security interest on the PPSR.
Alleasing registered its security interest against OneSteel’s ABN. That was a mistake as the registration should have been over OneSteel’s ACN.
When OneSteel went into voluntary administration, the administrators identified Alleasing’s mistake and successfully argued that the security interest was invalid. As a result, the administrator did not have to return Alleasing’s property to Alleasing.
The case serves as a reminder the Personal Property Securities Act (PPSA) registration requirements differ depending on who the grantor is. The PPSA also specifies the sources that need to be checked before a registration is made.
Where a registration is not made against the correct details or taken from the correct source, the security interest will be defective.
Below is a summary of details to register against and where to source the details from.
| Entity type | Details | Source |
|
Individual |
Surname, given names and date of birth | Driver’s licence issued by state or territory* |
|
Managed Investment Scheme (i.e. corporate trustee of a trust with ARSN) |
ARSN |
ASIC’s records |
|
Company |
ACN | ASIC’s records |
| ARBN (if no ACN) | ASIC’s records | |
| Name of company (if no ACN or ARBN) |
Constitution or equivalent document |
|
|
Corporate trustee of a trust |
ABN | Australian Business Register |
| ACN (if no ABN) | ASIC’s records | |
| ARBN (if no ABN or ACN) | ASIC’s records | |
| Name of company (if no ABN, ACN or ARBN) |
Constitution or equivalent document |
|
|
Individual trustee of a trust |
ABN | Australian Business Register |
| Surname, given names and date of birth (if no ABN) |
Driver’s licence issued by state or territory* |
|
|
Partner of a Partnership** |
ABN | Australian Business Register |
| If no ABN, it depends on the nature of the partners: | ||
| 1. Company | ASIC’s records | |
| a. ACN | ASIC’s records | |
| b. ARBN (if no ACN) | ASIC’s records | |
| c. Name of company (if no ACN or ARBN) | Constitution or equivalent document | |
| 2. Individual – Surname, given names and date of birth |
Driver’s licence issued by state or territory* |
*Where the individual grantor does not have a driver’s licence issued by the licensing authority of a state or territory of Australia the rules specify a different source from which the details must be obtained.
**Different rules apply where an individual partner grants a security interest over its net interest in a partnership.
If you need advice or assistance with any Personal Property Securities Act (PPSA) issues, please contact our Business Law team: Matt Bell or Michael Gibson
