Justice Gleeson of the Federal Court of Australia has provided further clarification surrounding the power of the Registrar to correct errors on the Personal Property Securities Register (PPSR) in the case of SFS Projects Australia Pty Ltd v Registrar of Personal Property Securities [2014] FCA 846.
In this case, SFS Projects Australia Pty Ltd (SFS Projects) was assigned three security interests that were already registered on the PPSR. A mistake was made by the assignor who incorrectly changed the end date of the registrations, instead of changing the name of the secured party to SFS Projects. If the error was not corrected, SFS Projects would be deprived of the benefits of a continuously perfected security interest under the Personal Property Securities Act 2010 (PPSA).
Continuous perfection is an important concept in the PPSA because a perfected security interest has priority over an unperfected security interest, and a security interest that has been continuously perfected for the longest time generally has the highest priority.
On 11 August 2014, Justice Gleeson described the purpose of section 186 of the PPSA as being to ensure that the PPSR contains all correct information. Therefore, any information which has been incorrectly removed from the PPSR should be reinstated. The power is not confined to mistakes made by the Registrar but extends to errors and mistakes made by the party registering the security interest.
The applicants made further submissions in an attempt to restore continuous perfection to the three security interests. The reasoning for the further application was to ensure that anyone who searched the PPSR would have complete and accurate information about the security interests. Justice Gleeson made the direction and order for the Registrar to register a financing change statement to restore data to the PPSR, to allow for continuous perfection of the three security interests pursuant to the Registrar’s power in section 186 of the PPSA.
For further information on the operation of the PPSR contact
Meagan O'Connor
Principal
Sladen Legal
+61 3 9611 0106
moconnor@sladen.com.au
Luke Duggan
Lawyer
Sladen Legal
+61 3 9611 0176
lduggan@sladen.com.au