In SFS Projects Australia Pty Limited v Registrar of Personal Property Securities  FCA 846, Gleeson J of the Federal Court held that the PPS Registrar (Registrar) does have the statutory power to restore registrations to the PPS Register even where mistaken removal is the result of a lodging party’s incorrect amendment application.
In July 2014, the applicant was assigned three security interests that were already registered on the PPSR. However, the assignor’s financing change statement mistakenly applied to release the registrations, rather than merely record the assignment.
Therefore, the parties jointly requested that the Registrar restore the registrations under s 186 of the PPS Act. That section empowers the Registrar to restore registrations where it appears to the Registrar that the data was “incorrectly removed” from the Register.
The Registrar contended that this power was only enlivened where there had been an incorrect exercise of power by the Registrar, not where the parties themselves had made the mistake.
Gleeson J held that the Registrar’s power to restore registration extends to instances where registrations had been ‘incorrectly removed’ because of mistakes by lodging parties. His Honour reasoned that this broad reading of the power was consistent with the statutory purpose of maintaining an accurate PPS Register.
In this case, the three registrations had been ‘incorrectly removed’ in the sense that removal did ‘not correctly reflect the intentions’ of the parties. The Registrar could therefore lawfully restore them to the Register.
This decision will no doubt be welcomed by those lodging PPS registrations, as it confirms that parties may be able to undo mistakes made in the amendment applications.
However, subsequent creditors may be disadvantaged by this decision, and should be aware of potential risks. Section 186(2) of the PPS Act provides that registrations are restored as if they had ‘never been removed from the Register’. Accordingly, there is some potential for subsequent creditors to trade on the basis of a PPS Register that subsequently changes when the Registrar undoes mistakes made by earlier lodging parties.