Recent posts have concerned themselves with how to conduct searches of the PPSR and how to set up an alert to be notified when a new registration has been lodged against you.
It seems a natural follow on to now look at your options should you find that someone has lodged a registration against you that you don’t believe should be there.
The most likely scenarios are where:
- Trading that had given rise to a security interest has been fully concluded with no reasonable expectation of further trading in the foreseeable future; or
- A trading partner (or indeed, anyone) is asserting a security right to which you have never agreed.
While a registration without a solid underlying security interest is, effectively, worthless it nevertheless has the potential to cause problems – particularly should you find yourself having to negotiate a loan with a fussy financier or deal with an overly cautious conveyancer when trying to sell some property.
Your first course of action should be to write to the Secured Party that lodged the registration.
While, for the sake of the legislation, you need to write to the person/contact point identified in the registration as the Address for Service, there is no harm in also involving a more familiar contact in the correspondence if you feel that might be helpful to your cause.
However, I would strongly discourage adopting an overly aggressive stance and threats of legal action and penalties should definitely be avoided. I’ve had a number of such approaches referred to me and have found that, rather than intimidate the recipient, they have invariably provoked a desire on their part to dig their heels in and devote unnecessary time and effort into trying to find fault with the demand!
All that is needed is a short, polite letter, referencing the registration number in question, suggesting that the registration is no longer required/valid and requesting its discharge. Importantly, the letter should also add that it is being sent in accordance with section 178 of the PPSA.
Something along the following lines should suffice:
REQUEST TO DISCHARGE REGISTRATION 201401010007553
It has come to our attention that you have lodged the above registration against us on the Personal Property Securities Register.
We have reviewed our dealings with you and find them to have been fully concluded with no outstanding obligations; consequently we request that you effect the discharge of this registration at your earliest convenience.
We will review the situation in 5 business days’ time.
Please note that this letter has been sent in accordance with section 178 of the Personal Property Securities Act.
Yours faithfully… etc
Or, depending on the circumstances, the red text could be replaced with something along the following lines:
We have reviewed our dealings with you and find that no security interest of the nature described in your registration has been agreed by us
If your section 178 request to the Secured Party fails to elicit a satisfactory response, your next step is a section 180 request to the PPSR.
While the PPSA does not stipulate the length of time that should be available to a Secured Party to attend to your request, taking the next step of approaching the PPSR directly requires that they have had at least 5 business days to deal with your request.
To assist you in making your s180 request, the PPSR has a specially designed form for you to complete. This can be found at:
The form is comparatively straightforward although I’ll quickly run through the essentials.
All this information can be taken from the details of the registration itself. If more than one Secured Party was listed on the registration (as may often be the case), you’ll need to complete one of these forms for each.
The form is asking for your details here – you are the applicant and, certainly in the context of this post, you are the ‘person’ identified as the Grantor in the registration.
Depending upon the circumstances, the response to the final question in this section:
Will depend upon whether you still have ownership of the goods in question or have used them up or on-sold them.
- If you still have ownership then your interest is an ‘Other Interest’,
- if you have on-sold them on terms that mean you still have a right to them in the event of non-payment then you have a ‘Security Interest’,
- but if you have used them up or on-sold them and have been paid in full, you have neither a ‘Security Interest’ nor ‘Other Interest’.
The amendment demand to which the first tick box refers will be the letter you sent to the secured party asking for the discharge – as you can gather, this box should be ticked and you should attach a copy of the letter.
In the circumstances we’ve been looking at in this post, box (a) should be ticked. However, if you are seeking an amendment to a registration in respect of a legitimate security interest and merely wish to ensure certain specific collateral is excluded from its terms then (b) would be more appropriate.
The amendment demanded will, invariably, be the discharge of the registration.
Following the relatively self-explanatory declaration on the final page(s) the completed form should be sent to firstname.lastname@example.org.
Once the form is processed by the PPSR, it will write to the Secured Party inviting them to comment on your demand. The Secured Party has 5 business days to comment and, in the absence of any response, the PPSR will discharge the registration (or amend it) as per your request.
If the Secured Party responds, within the 5 business days permitted, to the effect that the registration should stay in place as per its current terms then, unless the Secured Party’s explanation is transparently spurious to the PPSR Registrar, your only remaining recourse will be to the Courts (section 182) – it would be exceedingly unusual if this became necessary. But if it did, you’ll need to get professional legal assistance.