Registering on the PPSR without reasonable grounds? You could be penalised

John Bennett, ||
Co-authored by Sophia Fresnel

Failures to register have notoriously cost businesses millions of dollars in assets under the Personal Property Securities Act 2009 (PPSA). Similarly infamous are the costs and delays in commercial transactions caused by baseless registrations.

In a notable development addressing the latter challenge, it appears for the first time that in Registrar of Personal Property Securities v Brookfield [2024] FCA 29, a person has been fined for registering when they were never a secured party and didn’t believe on reasonable grounds that they would ever become one.

Belief required before registering

Section 151(1) of the PPSA requires that a person must believe on reasonable grounds that they are a secured party or will become one before they register. That is, a person may only register if they believe on reasonable grounds that they will hold a security interest for their benefit.

A person only has a security interest if there is a security agreement granting them the interest. However, section 151(1) does not require execution of the security agreement before registering. Indeed, there are highly justifiable reasons for registering even before documenting the security agreement. These reasons include:

  • ensuring super-priority of purchase money security interests;[1] and
  • reducing risks of security interests vesting on insolvency[2]

Registering before documenting security agreements differs from the common and pervasive problems in practice created by groundless or vexatious registrations. These ‘dodgy’ registrations are often encountered in disputes over assets (especially in insolvencies) and ‘at the last minute’ in business sales. They are usually removed by the administrative process with the Registrar of Personal Property Securities. However, Courts and Tribunals have also removed the registrations on numerous occasions.[3]

The facts

The proceedings related to a heavily litigated matter with ‘an unfortunate history and…a significant amount of enmity and animosity.’[4]

Blueprop sold its rent roll to Real Estate Now under a sale and purchase agreement. Blueprop then purported to assign the debt owed to it under that agreement to a ‘corporate investigator’.

The corporate investigator registered nine times over several years against Real Estate Now on the Personal Property Securities Register (PPSR). On each occasion the corporate investigator relied on the agreement and the debt assignment to support the registrations. The registrations kept being removed from the PPSR because there was no evidence of a security interest in the agreement or assignment.

In mid-2023, the Registrar filed civil proceedings against the corporate investigator seeking penalties under section 151 of the PPSA in respect of the last two registrations.

The outcome

The Court agreed with the Registrar that the agreement and the assignment did not grant the corporate investigator a security interest. Further, the Court found that the corporate investigator did not believe on reasonable grounds that they were a secured party. Accordingly, the Court declared that the corporate investigator had contravened section 151(1) of the PPSA with the last two registrations. The corporate investigator was ordered to pay $30,000 to the Commonwealth.

The lessons

It is unclear whether the decision will spark a more assertive approach from the Registrar with combatting groundless registrations. The Court remarked that there is ‘no obvious reason for the Registrar’s apparent reluctance to date to invoke the civil penalty provisions of the PPSA’ and that the Registrar ‘has a duty to maintain the integrity of the Register and to protect the public from obvious abuses based on his past knowledge and own experience of the manner in which a particular person…has purported to use the PPSR’.

However, the Court equally noted that this was a ‘clear case’ to invoke the civil penalty provisions of the PPSA. The Court also noted previous cases where courts dealt with the registrations by simply removing them. It may be added that in those cases the courts dealt with private litigants and used injunctions and adverse costs orders to deter further vexatious registrations.

The Court relied on the correspondence from the Registrar in finding that the corporate investigator didn’t believe on reasonable grounds that they were a secured party. In particular, the Registrar had already served the corporate investigator with six amendment notices. Each of these notices explained that the registrations did not secure any obligations. The notices also invited the corporate investigator to appeal to the Administrative Appeals Tribunal but the corporate investigator did not appeal. Finally, and before the last two registrations, the Registrar informed the corporate investigator ‘that registering a financing statement on the PPSR in the absence of a valid security interest…may…constitute an offence’.

The Court emphasised that the corporate investigator’s contraventions were serious. However, while it held that the total maximum available penalty arising from all contraventions was $315,900, it only fined the corporate investigator $30,000. Factors that appear to have reduced the penalty included the corporate investigator not having legal training, no evidence of any loss or damage, no previous contraventions of the PPSA by the corporate investigator, and their acrimonious litigation history with Real Estate Now.

Overall, the decision is a welcome one for businesses and users of the Register. The Court clarified that it does not tolerate flagrant repeated groundless registrations. Yet it did not impose an overly harsh punishment on the corporate investigator who always maintained they believed they had a security interest. The Court also didn’t criticise the practice of genuine secured parties registering their security interests before documenting their security agreements. Therefore, those secured parties may continue their early registration practices on a business-as-usual basis.

Read our Plain English Guide to Personal Property Securities Act – PPSA and PPSR.

For more information or to discuss registering assets under the PPSA, please contact Coleman Greig’s Commercial Advice lawyers.


[1] See PPSA ss 62(2)(b) and 62(3)(b) and see also P Twin Holdings Pty Ltd v SG Old Pty Ltd [2017] WADC 77.

[2] See PPSA s 267 and Corporations Act 2001 (Cth) s 588FL.

[3] See for example Pogana Pty Ltd v Registrar of Personal Property Securities [2022] AATA 2441; BMW Australia Finance Ltd v Mehajer Vision Pty Ltd (No 2) [2021] NSWSC 1379; Getakate Pty Ltd v Beniki Finance Pty Ltd [2021] FCA 1118; Snowy Valleys Council v Evans [2021] NSWSC 428; Wickham Hill Investment Pty Ltd v Ding [2019] NSWSC 631; RG Murch Nominees Pty Ltd v Annesley [2019] VSC 107; Rubis v Garrett (No 2) [2018] FCA 2011; Treasury Wines Estates Vintners Ltd v Garrett [2016] FCA 715; NAB v Garrett [2016] FCA 714; Macquarie Leasing Pty Ltd v DEQMO Pty Ltd [2014] NSWSC 1466; Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd [2014] VSC 217.

[4] Brookfield v Real Estate Now Pty Ltd [2019] FCA 993 at [1].


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