PPSR Case Study: ABN vs ACN
In a case* involving a disputed Personal Property Security Register (PPSR) matter it was made clear that a mistake as simple as using an ABN instead of an ACN is enough for a company to lose their secured interest.
Alleasing Pty Ltd (Alleasing), as Lessor, had entered into a leasing agreement with OneSteel Manufacturing Pty Ltd (OneSteel) for machinery and various equipment. Alleasing proceeded to register its security interest over the leased equipment as the secured party on the PPSR.
During the process of registration Alleasing mistakenly registered its interests over OneSteel’s ABN and not its ACN.
The ‘what-if’ scenario arose when OneSteel entered into voluntary administration and the administrators discovered Alleasing’s defective registration. The Administrators argued registrations were in fact unperfected.
OneSteel argued that in accordance with section 164 and 165(b) of the Personal Properties Securities Act 2009 (Cth) (PPSA) Alleasing’s registration was defective due to the serial number of the equipment not being recorded and conversely, recording no ACN had created an inability for other creditors to search the register and see Alleasing’s registered interest.
Justice Brereton found a distinction exists between ABNs and ACNs as provided for within the PPSA, even in circumstances where an ABN includes the nine digit ACN.
His Honour concluded the absence of an ACN in the registrations amounted to a serious misleading defect and consequently Alleasing’s registrations were void and they lost ownership of the equipment.
If you require advice on PPSR matters please contact our Commercial + Property team.
A recent court case saw the makers of Panadol take on Nurofen in a dispute over the use of claims made during Nurofen’s advertising campaigns. As a result, Nurofen is no longer able to advertise that its products provide faster and more effective pain relief for common headaches than Panadol because of this Federal Court of Australia decision. ... read on
Do you want to hit the ground running in the new financial year? We have all the details you need to know about the key legal changes your business will face from 1 July 2018. Click through via the numbered heading for more information on any of these topics.... read on
An ipso facto clause is a common clause found within contracts and agreements that allows for one party to terminate (or vary) a contract or agreement when the other party enters insolvency. The new reforms will apply only to contracts entered into after 1 July 2018. ... read on