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There’s a Mistake on Your PPSR Registration: What Now?
Monday, May 5th, 2014

CraigH

By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

5 May 2014

The Personal Property Securities Act 2010 (“PPSA”), which came into effect in January 2012, has had a big impact on many Australian businesses.  PPSA legislation created the Personal Property Securities Registrar (“PPSR”), a national, online register, requiring interests in personal property to be registered.    Such interests may be as small as a plasma TV bought on hire purchase from Harvey Norman or as major as a multi-million dollar commercial property lease.

 So, what happens when someone makes a mistake filling in a PPSR online form?  The PPSA says that a mistake will make a registration ineffective if it is ‘seriously misleading.’  But the term ‘seriously misleading’ has not been defined.

As it happens a mistake was made in NSW when, instead of entering a company’s ACN, its ABN was used.  When the case came to court (Future Revelation Ltd v Medica Radiology and Nuclear Medicine Pty Ltd [2013] NSWSC 1741) Justice Brereton said, in his decision, that it is well known the PPSA is modelled on and derived from similar legislation in Canada and New Zealand.  The Court therefore looked to a Canadian decision to assistance in defining the term ‘seriously misleading.’

Canadian case law suggests that the test for whether a mistake is “seriously misleading” is whether it will result in the registration not being disclosed upon a search.  In Future Revelation, such a search would have identified clearly enough the secured party, even though its ABN and not ACN was stated.  The judge’s view was very clear that this defect was not seriously misleading or indeed for that matter misleading at all.

This is unlikely to be the last word on this issue as the application in Future Relevations was made urgently on an ex-parte basis and the situation could well differ should this matter return to the Court for further argument or if a similar matter is brought before the Court.

The important lesson to take away from this decision is the importance of checking and double checking information contained on the PPSR at the time of registration to ensure this sort of issue does not arise, because it may render the relevant security interest ineffective.

If an error is discovered, then it may be possible to amend the registration (see http://www.ppsr.gov.au/ForBusiness/Howtoregister/Pages/default.aspx) and a party affected by an incorrect registration can demand the registration be amended (see http://www.ppsr.gov.au/AsktheRegistrar/PracticeStatements/Documents).

Remember: when in doubt, consult a lawyer.  Most of us don’t charge for an initial phone conversation to decide if your own query needs further action.

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