The Personal Property Securities Register (PPSR) has changed the way business is done in Australia.  To a large extent, it makes identifying a security interest over personal property much easier than ever before. That said, knowing how to do the right search will truly unlock the convenience now afforded by the PPSR.

In most cases, the Personal Property Securities Act 2009 (Cth.) (PPSA) and the Personal Property Securities Regulations 2010 (Cth.) (PPS Regulations) require searches to be conducted using information about the ‘grantor’ of the relevant security interest (i.e. the person granting the security interest in the personal property, often the owner, to the secured creditor).  Most commonly, a grantor will be either an individual, a company, a trust or a partnership and in each case, different information could potentially have been used to register the relevant security interest.

To be sure your PPSR search will be effective in revealing whether a security interest has been registered over a specific grantor’s personal property, we provide the following handy tips to maximize your search results:

Individual Grantor Search

Individual grantor searches can be conducted to identify whether an individual has any security interests over his or her personal property. An individual search extends to a sole trader who has an ABN for the business in respect of which the security interest may be granted. In order to conduct an individual grantor search, you will need the individual’s:

• full and correct name; and

• date of birth.

That is among the simplest types of searches that can be conducted on the PPSR.

Organisation Grantor Search

In the case of companies, an organisation grantor search can be conducted to identify whether the grantor organization (the company) has granted any security interests over its personal property. When conducting an organisation grantor search, we would recommend that you conduct separate searches using the following identifiers:

• If applicable, the Grantor’s Australian Registered Scheme Number (ARSN). ARSN’s are issued to Managed Investment Schemes;
• The Grantor’s ACN;

• If applicable, the Grantor’s Australian Registered Body Number (ARBN). ARBNs are issued to registrable Australian bodies and foreign companies;

• The Grantor’s ABN; and

• The Grantor’s name.

The problem here is that a PPSR search of one particular identifier (lets say the ACN) will only reveal security interests registered against the that identifier and not any others (for example, the ABN). In our experience, people will often only register a security interest against the ABN or ACN, but not both. As such, if you conduct a search only against the ACN, you will not find out if there is another security interest registered against the ABN or indeed some other identifier. For that reason, it is always best to err on the side of caution and conduct a search against each identifier.

Trusts

It is often the case that security interests are granted over personal property that is held in trust. Under the provisions of the PPSA, a security interest must be registered against the trust and not the trustee to be effective (subject to a few exceptions set out in the PPS Regulations).

In light of the above, in order to conduct a comprehensive search concerning trust property we would suggest that you first establish the identity of the trustee of the trust, then conduct separate searches using the following identifiers:-

• The ABN of the trust;

• The ARSN of the trustee (if applicable);

• The ACN or the ARBN of the trustee (as applicable);

• The ABN allocated to the enterprise carried on by the trust;

• The name of the trust or the trustee; and

• If the trustee is an individual, the full name of the individual.

All of these identifiers can be relevant to determining the effectiveness of the registration and any one of them could be the only identifier which might reveal a registered security interest. In our experience, registrations are frequently (incorrectly) made against the trustee (not the the trust as required) and for that reason numerous headaches can be avoided by conducting a more comprehensive search in the first instance.

Partnerships

A partnership is not a separate legal entity. For this reason, searching the PPSR in respect of property caught up in a partnership can be difficult. Ordinarily the position is that if the partnership has an ABN, registrations will be made against the ABN. If the partnership has not been allocated an ABN however, then the registration will likely be made against one or more of the partners.

In light of all of that, we recommend that in respect of property held in partnerships you conduct separate searches using the following identifiers:

• The partnership’s ABN;

• The name that identifies the partnership;

• The full names of each partner (if individual partners); and

• The ACN of each partner (if a body corporate).

As with trusts, any one of these identifiers could be the only identifier which reveals a registered security interest.

Serial Numbered Consumer Property 

So far we have only been discussing searches relating to the relevant grantor of a security interest. An exception to the general rule about ‘grantor searches’ arises in respect of ‘serial numbered goods’. Under the PPSA, ‘grantor’ details do not need to be registered if the security interest relates to collateral that is serial numbered consumer property. Consumer property is defined to mean personal property held by an individual for private use only (however in general it refers to things like motor vehicles, water craft or aircraft).  As such,  if you are searching for interests registered over goods which are serial numbered consumer property, a grantor search may not reveal any security interests and you will need to search using the serial number of the goods.

Conclusion 

Above all, it is important to remember that the PPSR is only useful to the extent that you are searching for the right thing. To assist with this, our number one recommendation is that before searching the PPSR, you conduct due diligence to ascertain how the collateral is held (i.e. directly or in a partnership or trust) and in which capacity the grantor has granted the security interest (as an individual, company, partner or trustee). Once you have the right entity, we recommend taking great care to ensure that you have the exact spelling and correct case (the PPSR is case sensitive and can ultimately result in an incorrect search return).

ERA Legal is always available to help.  Should you need assistance with conducting PPSR searches or registrations, please do not hesitate to contact us.