Napoleon, Arrium, RCR Tomlinson (and don’t forget Max Brenner) – with companies continuing to tumble into external administration, it is more important than ever to ensure your PPS registration is correct.
But what if you notice an error in your registration after it’s been registered? Can you correct your registration and still maintain your priority?
Would the registration by any other name be so sweet?
Whilst some registration attributes can be amended, many cannot.
But be aware! It is the attributes that cannot be amended that are more likely to adversely affect your security interest.
For instance, you can add or remove grantors (eg to remove or add a borrower’s name) or change the end date of your registration (to extend or shorten your registration). This is helpful, particularly if your registration is about to expire and you wish to renew it to maintain its existing priority.
However, you cannot correct an error in the grantor’s name (eg Clark instead of Clarke) or change the nature of your registration to a purchase money security interest (PMSI) to afford it super priority.
Other examples of what cannot be changed on a financing statement are:
- Grantor’s date of birth
- Serial number
- Classification of collateral as inventory
- Start date / time of your registration
- Whether the assets are subject to control
Lodging a fresh (correct) registration may not be enough to save you from the final curtain. For instance, additional interests may have been registered between the time of your first (incorrect) and second (correct) registration and now take priority to your interest. Further, if the statutory time period within which your PMSI must be registered to obtain super priority has lapsed, a late (albeit otherwise correct) registration is not of itself a cure. An application to Court may help right the wrongs of your star-crossed, untimely or incorrect registration but may not always be available to change what’s written in the stars of the PPSR.
Much Ado About Nothing?
As with all PPS interactions, if you are amending a registration, care should be taken to avoid unintended consequences, such as the accidental removal of the registration, as occurred in SFS Projects Australia Pty Ltd v Registrar of Personal Property Securities  FCA 846.
In that matter, security interests were assigned. The assignor sought to register financing change statements to reflect the assignment, but accidentally lodged statements showing the security interests had been released. Once those statements were registered, the security interests, which had previously been continuously perfected, became ineffective.
The removed data was ultimately restored by Court order, several weeks of (likely) sleepless nights.
To minimise the risk of hitting ‘enter’ and ending up with an ineffective registration, it may be prudent to create a fresh registration instead. Of course, the circumstances in each matter should be considered before any decision is made.
When the hurly burly’s done, is the battle lost or won?
On the other side of the coin, if someone has made an error in a registration affecting you, you can dispute that registration and request it be either changed or removed altogether.
Whether you choose to approach the Court or the Registrar of Personal Property Securities, there are streamlined processes for challenging registrations.
Time, cost and the complexity of legal issues are all considerations when determining which route is best.
Prevention is always better than cure and the team at Polczynski Robinson can advise you on your potential registrations. If your financing statement has already gone off-script or you are concerned about the validity of a PPS registration, Polczynski Robinson can also direct you through to curtain call.
For advice on PPS registrations made or to be made by you, or any registrations affecting you, contact Kylie Tate or Nicola Bailey of our office.