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It’s all in a name… or a company number: the seriously broad implications of “seriously misleading”

Key Points

  • Fiji, Papua New Guinea, Solomon Islands and Vanuatu now all have enacted and brought into force personal property security transaction regimes.

  • Lenders such as financial institutions, businesses and individuals lending money to others should be aware when lodging a notice on the relevant security registry that making a mistake or simple error can be disastrous to the enforceability of your security interest.

  • Case law in Australia has clarified when a simple error would be deemed to have invalidated a security interest, namely small errors such as listing the wrong company identifier number can leave you with an unperfected security.


In 2019 Fiji’s Personal Property Security Act 2017 commenced, bringing Fiji’s security interest regime in line with neighbouring countries, such as PNG, Vanuatu, Solomon Islands and Australia. With all these countries now having a scheme in place to allow the “perfection” of a security interest by way of registration on a digital personal property register (or in Solomon Islands’ case a secured transaction registry) (PPSR), now is a better time than ever for a friendly reminder on the importance of getting your registration details right when registering security interests!

Before getting into what happens if you get a registration wrong, here’s a refresher on personal property security interests - under the various secured transaction regimes in Australia, PNG, Vanuatu, Solomon Islands and Fiji, in order to be granted a security interest a lender (secured party) and borrower (security provider) must enter into a security agreement. Once the security agreement has been entered into, the security interest may be “perfected” by one of three methods:

1. the registration of the interest on the PPSR;

2. taking possession of the collateral; or

3. taking control of the collateral.

While in most circumstances registration on the PPSR is the easiest and most convenient way to “perfect” and ensure you’ve got the highest level of priority over collateral as a lender, you need to be aware that errors may invalidate your notice and so leave you with an “unperfected” security.

What information do you need to register your security interest?

Every jurisdiction requires slightly different information when registering details of a secured transaction on the relevant PPSR. In summary, the below list sets out the type of information you may need to identify a debtor and security interest, but information may differ depending on the type of debtor entity or collateral and the relevant jurisdiction:

  • name of the debtor (as listed on formal government issued identity documents or by incorporating documents);

  • the debtor’s address;

  • a description of the collateral/security interest (including, registration or serial numbers);

  • taxpayer identification number (e.g. Australian Business Number, Tax Identification Numbers);

  • relevant company or entity numbers (e.g. Australian Company Numbers, or other company identity numbers depending on the jurisdiction).[1]

So, what happens if you make a mistake?

Making a mistake on any of the above can be disastrous!

In Australia, a registration on the PPSR is only defective under section 164(1) of the Personal Property Securities Act 2009 if there exists:

“a seriously misleading defect in any data relating to the registration… or defect mentioned in section 165.”

Similarly, laws in other jurisdictions state that a notice that contains a defect that would be “seriously misleading” would invalidate said notice.

In Fiji, “the validity of the registration of a notice is not affected by any defect, irregularity, omission or error in the notice unless the defect, irregularity, omission or error is seriously misleading” and “a notice that insufficiently identifies the debtor is seriously misleading.[2]

In Vanuatu, “a registration is invalid if there is a seriously misleading defect, irregularity, omission, or error.”[3]

In Solomon Islands, “a notice substantially complying with the requirements [under section 30 of the Secured Transaction Act 2008] is effective unless it is seriously misleading, such as a notice that does not provide the correct name of the debtor.”[4]

In PNG, “a notice substantially complying with the requirements of this Act is effective, even if it is insufficient under [section 82 of the Personal Property Security Act 2011], unless the insufficiency makes the notice seriously misleading” and “a notice that insufficiently provides the name of the debtor is seriously misleading.”[5]

In some cases the legislation clarifies what “seriously misleading” equates to. For example, in PNG and Solomon Islands specifically explain that failing to use a debtor’s correct name would be seriously misleading, so as to invalidate a registration. But, that’s not the only circumstance where an error can be “seriously misleading”, as case law shows what can constitute “seriously misleading” can be seriously broad.

What does “seriously misleading” mean?

While there is a lack of precedent in Pacific Island jurisdictions on what constitutes “seriously misleading”, a 2017 Australian case imparts a valuable warning to lenders wanting to perfect their security interests on the PPSR.

In OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21, the borrower entered into a lease agreement for machinery and equipment. The lender subsequently registered a financial statement on the PPSR but identified the borrower by its Australian Business Number (ABN) and not by its Australian Company Number (ACN) as required under the Personal Property Securities Act 2009 (Cth) and Personal Property Securities Regulations 2010 (Cth).

Although the ABN lodged on the PPSR contained the nine-digit sequence constituting the borrower’s ACN, the two identifiers were in actuality issued by different agencies and therefore was not the same nor requisite 'information'. As such, Justice Brereton held that under section 164(1)(a) of the Personal Property Securities Act 2009 (Cth) the registrations were defective because of the inclusion of two additional digits to the borrower’s ACN making the initial registrations 'seriously misleading' and rendering the security interest unperfected.[6]

While the case is Australian, Australian case law is highly persuasive in PNG, Vanuatu, Solomon Islands and Fiji, so lenders across the Pacific should be aware of the wide-reaching impacts of the case. Namely, seemingly small mistakes in the details lodged on the PPSR (e.g. a spelling mistake or numerical error) can invalidate registrations. Such invalidation of a PPSR notice will leave a lender with an unperfected security interest and may mean third parties could obtain an interest over collateral, by way of sale, transfer, charge or otherwise.

Next Steps

Courts across the Pacific may follow the judgment in OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21. As such, it is advisable to stay constantly vigilant when registering security interests and ensure you have procedures in place to check for defective registrations and that details lodged exactly match the requisite information.

You can remain constantly vigilant by instituting policies and procedures like training your staff on the proper way to register security interests and how to identify defects, and initiating timely and frequent internal and external reviews of your security interests.

For more information on how to register your security interests correctly, please do not hesitate to contact us.

[1]Personal Property Security Act 2017 (Fiji) s 74(1); Secured Transactions Act 2008 (Solomon Islands) s 30; Personal Property Security Act 2011 (PNG) s 79; Personal Property Securities Act 2008 (Vanuatu) s 116. [2] Personal Property Security Act 2017 ss 75(1) - (2). [3] Personal Property Security Act 2008 s 126. [4] Secured Transactions Act 2008 s 30(5). [5] Personal Property Security Act 2011 s 82. [6] Alleasing Pty Ltd V OneSteel Manufacturing Pty Ltd [2017] FCA 656.


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