Australia: PPSA Update – Registration against company ABN instead of ACN – A seriously misleading defect in registration

Last Updated: 15 February 2017
Article by David Murray-Nobbs

The Personal Property Securities Act 2009 (Cth) (PPSA) has posed many challenges for financiers and lessors since its commencement, as it (amongst other things) sets out detailed rules about what is required in order to have an effective registration on the Personal Property Securities Register (the PPSR). The decision in In the matter of OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21 demonstrates the critical importance of making registrations strictly in accordance with the requirements set out in the PPSA.

Key learnings from the OneSteel case include:

  1. registering a financing statement using the ABN of a company grantor instead of its ACN will render the registration seriously misleading;
  2. a registration which is seriously misleading will not cease to be seriously misleading just because a person searching the PPSR happens to discover the registration - the PPSA does not require that a person is actually misled in order for a registration to be ineffective;
  3. section 252B of the PPSA, which provides that the PPSA does not apply to the extent that it results in the acquisition of property from a person other than on just terms, does not render sections 267 and 267A of the PPSA (which provide for the vesting in the grantor of certain unperfected security interests upon the insolvency of the grantor) of no effect;
  4. an application under section 588FM of the Corporations Act 2001 (Cth) to extend the time for perfecting a security interest for the purposes of section 588FL(2) of the Corporations Act (which deals with the effect of not registering security interests within the specified period) to avoid the risk that a security interest may vest in the grantor upon the grantor's insolvency will not be granted if the security interest has already vested in the grantor - section 588FM cannot be used to 'resurrect' an already vested security interest; and
  5. an application under section 293 of the PPSA to extend the date for registering a financing statement in respect of a security interest that is a purchase money security interest (PMSI) in order for the PMSI to take priority over other security interests which attach to the same goods will not be granted if the security interest has already vested.

The facts of the case are as follows:

  1. On 16 October 2014, Alleasing Pty Limited (Alleasing) and OneSteel Manufacturing Pty Limited (OneSteel) entered into a Master Lease Agreement (the MLA). Under the MLA, when OneSteel wished to lease goods from Alleasing, it would deliver a leasing schedule to Alleasing, which would then lease the goods to OneSteel on the terms set out in the MLA and the schedule.
  2. On 1 May 2015, OneSteel commenced leasing from Alleasing a Striker crushing and screening plant for a term of six years (the Plant Lease). OneSteel subsequently delivered another leasing schedule to Alleasing and, on 1 July 2015, commenced leasing spare parts for the crushing and screening plant, also for a term of six years (the Parts Lease).
  3. Both the Plant Lease and the Parts Lease were PPS leases pursuant to section 13 of the PPSA and, as a consequence, in order to safeguard its interests in the goods, Alleasing had to register financing statements on the PPSR.
  4. On 17 October 2014, Alleasing registered a financing statement on the PPSR in respect of the security interest arising under Plant Lease, and on 7 July 2015 it did so again in respect of the Parts Lease.
  5. Section 153 of the PPSA requires a financing statement to include, relevantly, the grantor's details as prescribed in the Personal Property Securities Regulations 2010 (Cth) (the Regulations). Part 1.3 of Schedule 1 of the Regulations provides that, if the grantor or a secured party is a body corporate that has an ACN, the financing statement must be registered using that body corporate's ACN. However, Alleasing registered both financing statements using OneSteel's ABN, not its ACN.
  6. On 7 April 2016, OneSteel appointed administrators.
  7. On 10 June 2016, the administrators informed Alleasing that they considered Alleasing's registrations in relation to the Plant Lease and the Parts Lease to be defective and ineffective, and that, as a result of section 267 of the PPSA, Alleasing's security interest – which in the context of a PPS Lease is the lessor's interest in the goods – had vested in OneSteel.
  8. On 14 June 2016, Alleasing registered new financing statements in respect of the Plant Lease and the Parts Lease, this time using OneSteel's ACN as the grantor identifying data. On 17 June 2016, Alleasing amended its original registrations to include OneSteel's 9 digit ACN.

The Problem for Alleasing

Section 164 of the PPSA provides that a registration is ineffective if there is a seriously misleading defect in the data relating to the registration or if there is a defect of a kind described in s165 of the PPSA.

Section 165(b) of the PPSA provides that there will be a defect in a registration if a search of the PPSR by reference only to the grantor's details which are required to be included in a financing statement under section 153 of the PPSA would not disclose the registration.

If there is such a defect in the registration, the security interest will be unperfected and may become capable of vesting in the grantor on the appointment of an administrator or the winding up of the grantor, pursuant to section 267 or section 267A of the PPSA.

Alleasing arguments included that:

  1. its registrations were effective because the 11 digit ABN used to describe OneSteel in the registrations included OneSteel's 9 digit ACN number.
    The court rejected this argument on the basis that a search of the PPSR using OneSteel's ACN alone would not have disclosed the registrations.
    The court also rejected Alleasing's argument that section 1344 of the Corporations Act (which provides that if a company is required or permitted to use its ACN under a law of the Commonwealth administered by the Australian Securities and Investments Commission (ASIC), it may use its ABN if the last 9 digits of the company's ABN are in the same order as the last 9 digits of its ACN) assisted Alleasing as the PPSA is not administered by ASIC.
  2. the registration was not seriously misleading because a person can perform "combined grantor searches" using B2G interfaces which, if only the ACN were entered, would nonetheless reveal registrations made using the grantor's ABN. Indeed, the administrators had discovered the registrations by, seemingly, doing such a search.
    However, section 171 of the PPSA provides that a person may search the PPSR by reference to, relevantly, the grantor's details required under section 153 of the PPSA (i.e., in the present circumstances, OneSteel's ACN). In noting that neither section 153 nor Part 1.3 of Schedule 1 of the Regulations refers to a company's ABN, the Court held that any search done using information other than the required data was an unauthorised search.
    Because a search authorised by the PPSA would not have disclosed the original registrations, the Court concluded that Alleasing's original registrations were ineffective.
  3. section 252B of the PPSA (which provides that the PPSA does not apply to the extent that it results in the acquisition of property from a person other than on just terms) prevented the vesting provisions in the PPSA from applying as they would result in a person acquiring property other than on just terms. If the vesting provisions were to be applied, it would result in OneSteel acquiring Alleasing's valuable property and leaving Alleasing to prove in the insolvency of OneSteel as an unsecured creditor, which was not just.
    However, the Court found that any "acquisition" effected pursuant to section 267 or section 267A of the PPSA was not an acquisition of property but rather was a genuine adjustment of competing rights, claims and obligations between persons with interests in the same goods. As a consequence, section 252B was not relevant.
  4. if it was not accepted that the original registrations were effective, an order under s588FM of the Corporations Act should be granted extending the time for perfecting a security interest for the purposes of section 588FL(2). Broadly, s588FL(2) provides that a security interest may vest in a company grantor if it is perfected after the later of (a) six months prior to the date that an administrator is appointed or that the winding up of the company grantor commences and (b) 20 business days after the date that the security agreement giving rise to the security interest came into force.
    Section 588FM(2) of the Corporations Act provides that an order extending the time for registration may be granted if the court is satisfied that (a) the failure to register was accidental or inadvertent or would not cause prejudice to other creditors or (b) it is just and equitable to grant the order.
    Alleasing submitted the failure to register the financing statements earlier was accidental or due to inadvertence and/or was not of such a nature as to prejudice the position of creditors or shareholders. However, OneSteel submitted that the power to extend time was not enlivened, because at the time the administrators were appointed the security interest had not been perfected and the security interest had vested.
    The Court agreed with OneSteel, noting that an order to extend the time for registration could not resurrect a security interest which had already vested. The security interest needed to have been perfected prior to the administrators being appointed. The same reasoning was applied to reject Alleasing's application for an order under section 293 of the PPSA to extend the date for registering a financing statement in respect of a security interest that is a PMSI in order for the PMSI to take priority over other security interests which attach to the same goods.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Kemp Strang has received acknowledgements for the quality of our work in the most recent editions of Chambers & Partners, Best Lawyers and IFLR1000.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

David Murray-Nobbs
Similar Articles
Relevancy Powered by MondaqAI
Carroll & O'Dea
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Carroll & O'Dea
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions