A vital element to registering financing statements correctly on the PPSR is inputting the correct grantor details. Searchers of the register will search for financing statements using those details. If the searcher searches on the correct grantor details, but a registrant registered the incorrect details, the search will not disclose the registration. Section 165(b) of the PPSA states that such a defect causes the registration to be ineffective.
Many secured parties are confused about the correct details to input for a grantor that is a trustee of a trust. It may seem intuitive to register against the trustee’s details since the trust itself is not a legal entity. However, the Personal Property Securities Regulations 2010 (Cth) (Regulations) prescribes the details which must be specified and, in many cases, the trust’s details rather than the trustee’s details are prescribed.
If the grantor is a trustee of a trust and the trust has not been allocated Australian Business Number (ABN) or an Australian Registered Scheme Number (ARSN), then the correct details are the relevant details of the trustee. For example, if the trustee is a body corporate, then, generally, the body corporate’s ACN should be inputted into the financing statement. If the trustee is an individual, then the correct details for an individual (as prescribed by the Regulations) should be inputted.
If, however, the trust has been allocated an ABN, the ABN must be inputted as the correct grantor details. The exception is if the grantor is the trustee of a trust that has been allocated an ARSN. In that case, the ARSN should be inputted. Inputting the trustee’s details (whether it be the ACN of a trustee company or the details of an individual trustee) when the trust itself has an ABN or an ARSN will result in an ineffective registration and, thus, an unperfected security interest.
Always refer back to the Regulations if in doubt about the correct grantor details.