Prosecution for improper personal property securities registrations
5 mins reading time
On 30 January 2024, the Federal Court of Australia delivered its verdict in the case of Registrar of Personal Property Securities v Brookfield [2024] FCA 29. This case centred around two false registrations on the Personal Properties Securities Register (PPSR), made in contravention of sections 151(1) and s151(2) of the Personal Property Securities Act 2009 (Cth) (PPSA).
In this case, the Registrar sought a penalty of $15,000, which was increased to $30,000 by the Court.
Why is this case significant?
This case is the first prosecution under the PPSA – and was handed down on the 12th anniversary of the PPSR coming into operation. It signifies the Registrar’s commitment to safeguarding the integrity of the PPSR against deliberate misuse or harm.
Looking ahead, this case also serves as a message that the Registrar will not hesitate to take decisive action against any fraudulent registrations that hinder Australian consumers and creditors from making well-informed financial decisions in a timely manner.
Why is this important to businesses?
Individuals and entities are reminded that the Registrar has powers to take action against unfounded or false registrations uploaded to the PPSR, and/or conduct that malicious interferes with the integrity and accessibility of the PPSR.
To ensure compliance with the registration requirements under the PPSA, businesses are encouraged to:
- Provide comprehensive training to their employees, to ensure they possess a solid understanding of the PPSR and are equipped to register transactions accurately and with proper basis;
- Exercise caution and diligence when making registrations, ensuring that they are backed by a reasonable belief that a security interest in the stated collateral does exist or will exist;
- Promptly remove any registration errors within the 5-day timeframe mandated by the PPSA; and
- Seek legal advice if they suspect an improper registration has been made over its assets or collateral. There are statutory procedures that can be followed to seek removal.
Overall, the intricacies of PPSA can prove challenging, and any uncertainties within this domain should prompt immediate consultation with legal experts to avoid the risk of penalties and, the potential breach of the PPSA.
How can Macpherson Kelley assist?
Our commercial team offers an array of services in this area, including:
- Advice on the requirements outlined in the PPSA and all related matters falling under this;
- Handling the registration of PPS transactions; and
- Conducting seminar classes to educate on the correct procedures for PPS registrations and the identification of proper basis.
If you have any inquiries or are interested our range of services, please contact our Macpherson Kelley experts.
The PPS regime is also set for significant reform in 2024 and beyond. For further detail on the current proposals, see our Insight Articles:
Proposed PPS Framework Reform – Macpherson Kelley (mk.com.au)
PPS Framework changes and Australia’s Agriculture Industry – Macpherson Kelley (mk.com.au)
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Prosecution for improper personal property securities registrations
On 30 January 2024, the Federal Court of Australia delivered its verdict in the case of Registrar of Personal Property Securities v Brookfield [2024] FCA 29. This case centred around two false registrations on the Personal Properties Securities Register (PPSR), made in contravention of sections 151(1) and s151(2) of the Personal Property Securities Act 2009 (Cth) (PPSA).
In this case, the Registrar sought a penalty of $15,000, which was increased to $30,000 by the Court.
Why is this case significant?
This case is the first prosecution under the PPSA – and was handed down on the 12th anniversary of the PPSR coming into operation. It signifies the Registrar’s commitment to safeguarding the integrity of the PPSR against deliberate misuse or harm.
Looking ahead, this case also serves as a message that the Registrar will not hesitate to take decisive action against any fraudulent registrations that hinder Australian consumers and creditors from making well-informed financial decisions in a timely manner.
Why is this important to businesses?
Individuals and entities are reminded that the Registrar has powers to take action against unfounded or false registrations uploaded to the PPSR, and/or conduct that malicious interferes with the integrity and accessibility of the PPSR.
To ensure compliance with the registration requirements under the PPSA, businesses are encouraged to:
- Provide comprehensive training to their employees, to ensure they possess a solid understanding of the PPSR and are equipped to register transactions accurately and with proper basis;
- Exercise caution and diligence when making registrations, ensuring that they are backed by a reasonable belief that a security interest in the stated collateral does exist or will exist;
- Promptly remove any registration errors within the 5-day timeframe mandated by the PPSA; and
- Seek legal advice if they suspect an improper registration has been made over its assets or collateral. There are statutory procedures that can be followed to seek removal.
Overall, the intricacies of PPSA can prove challenging, and any uncertainties within this domain should prompt immediate consultation with legal experts to avoid the risk of penalties and, the potential breach of the PPSA.
How can Macpherson Kelley assist?
Our commercial team offers an array of services in this area, including:
- Advice on the requirements outlined in the PPSA and all related matters falling under this;
- Handling the registration of PPS transactions; and
- Conducting seminar classes to educate on the correct procedures for PPS registrations and the identification of proper basis.
If you have any inquiries or are interested our range of services, please contact our Macpherson Kelley experts.
The PPS regime is also set for significant reform in 2024 and beyond. For further detail on the current proposals, see our Insight Articles:
Proposed PPS Framework Reform – Macpherson Kelley (mk.com.au)
PPS Framework changes and Australia’s Agriculture Industry – Macpherson Kelley (mk.com.au)