This week's TGIF considers In the matter of
OneSteel Manufacturing Pty Limited (administrators appointed)
 NSWSC 21, where the New South Wales Supreme Court held that
the registration under the PPSA of a security interest in valuable
mining equipment was defective because the grantor's ACN was
not included in the registration.
This dispute centred on an error in the PPSR registration of a
security interest in a crushing and screening plant used in the
mining industry. The amounts involved were considerable, as the
yearly rent on the crusher was over $4m and it had cost $23m to
construct and install.
The Lessor, an asset financier, registered a financing statement
for the crusher in October 2014. However, the employee of the
Lessor who registered the financing statements included only the
Grantor's ABN and not its ACN in the registration.
In April 2016, administrators were appointed to the Grantor. The
administrators considered the registrations to be defective because
they did not include the ACN, meaning that the Lessor's
interest vested in the Grantor. The Lessor disagreed and sought
declarations that the registration was effective, but also lodged
new financing statements that included the Grantor's ACN.
The issues to be decided by the New South Wales Supreme Court
Were the registrations defective because of the failure to
include the ACN?
Could the Court make an order to effectively re-enliven the
security by fixing a later time within which the new registrations
could be made?
WERE THE REGISTRATIONS DEFECTIVE?
Section 153 of the Personal Property Securities Act
2009 (Cth) (PPSA) requires that certain
prescribed data about the secured party and grantor must be
included in a registration. The Personal Property Securities
Regulations 2010 (Cth) specify that for a body corporate that
has an ACN, the ACN must be included in the registration.
Under section 164 of the PPSA, a registration is defective if
and only if there is a "seriously misleading defect in the
registration" or if there is one of the specified defects in
section 165. Section 165(b) provides that a regulation will be
defective if "no search of the register ... by reference only
to the grantor's details (required to be included ... under s
153) is capable of disclosing the registration".
In this case, the Court held that because section 153 and the
regulations require that a body corporate include its ACN, and
because a search of the register by reference only to an ACN would
not disclose the registration, the registration was defective.
Importantly, the Court held it was immaterial that commercially
available "combined grantor searches" would still have
found the registration if the user searched by ABN only. Such
services use the information given (eg, the ABN) to source other
information from external sources (eg, the ACN and company name),
and then conduct multiple searches of the PPSR. The Court held that
section 165(b) required that a single search using the ACN only had
to turn up the registration.
COULD THE COURT EXTEND THE TIME FOR EFFECTIVE
The Lessor also sought an order under section 588FM of the
Corporations Act 2001 (Cth) (Corporations
Act) on the basis that the failure to register was due to
"accident, inadvertence or some other sufficient
However, the Court refused the order because an extension under
section 588FM of the Corporations Act is only available where a
security interest is already perfected at the critical time (that
is, the insolvency event). Because the original registration was
defective and the security interest had not otherwise been
perfected, there could be no extension of time for the
The decision emphasises that the PPS regime requires strict
compliance with registration requirements, and that the Courts are
unlikely to be lenient when it comes to the consequences of user
In the ordinary case, registrations for body corporates that
have an ACN must always include the ACN. Notably, the ABN is not
currently required by the legislation unless, for example, the body
corporate is acting as a trustee.
As a matter of best practice, it is highly advisable that all
body corporate registrations include a company's ACN, ABN and
name. This ensures not only that the registrations comply with the
requirements, but also that registrations will be easily found
using any of an entity's relevant information.
Equally, practitioners should be aware that just because a
search of the PPSR shows a registration has been filed, further
investigation is required to determine whether that registration is
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.
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