- The NSW Supreme Court has awarded a $23 million windfall for an unperfected security interest because PPSR registrations were made against the grantor’s ABN and not its ACN.
- Registering against the ABN and not the ACN meant that the PPSR registrations were ineffective, defective and seriously misleading.
- Further, the vesting of an unperfected security interest in the grantor pursuant to the operation of the Personal Property Securities Act 2009 (Cth) does not amount to a compulsory acquisition of property on unjust terms in contravention of s 51 (xxxi) of the Constitution.
The recent NSW Supreme Court judgment of Brereton J in Re OneSteel Manufacturing Pty Ltd (administrators appointed)  NSWSC 21 has confirmed that certain registrations made against a grantor’s Australian Business Number (ABN) instead of its Australian Company Number (ACN) were defective. The case dealt with registrations made on the Personal Property Security Register (PPSR) by Alleasing Pty Limited (Alleasing) as the secured party against OneSteel Manufacturing Pty Limited (OneSteel) as grantor in respect of certain equipment leased by Alleasing to OneSteel (Equipment). Pursuant to the Personal Property Securities Regulations 2010 (Cth) (Regulations), the registrations were required to be made against OneSteel’s ACN. However, the registrations were mistakenly made against the ABN, being the same as its ACN plus an additional two digits. This error resulted in a finding that the registrations were unperfected and ineffective by reason of them being defective and seriously misleading. As a result, the Equipment vested in OneSteel in liquidation. Alleasing, as owner and lessor of the Equipment, consequently lost a $23 million crushing plant and spare parts.