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16 February 2018

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Personal Property Securities
Federal

Asked

Personal Property Securities - Disputing interest registration

How do you get an interest discharged over equipment if the party holding the interest is a business that has shut down?

Answered

Thank you for the question.

The following is an extract from the commentary in our Personal Property Securities Guide:

Disputing a registration

The administrative process

The Act sets out a procedure for disputing registrations, called the amendment demand administrative process. This process is only available in the circumstances set out within s 179 of the Act. The administrative process involves four main steps:

Step 1 – Sending amendment demand

An amendment demand needs to be sent to the secured party at the address for service provided in the registration. An amendment demand can only be made by a person with an interest in the subject collateral and requires the secured party to end the registration or omit particular collateral from the description. The amendment demanded must be an ‘authorised amendment’. Pursuant to s 178 of the Act, an authorised amendment is:

1. An amendment to end effective registration, including an amendment to remove the registration, because no collateral described in the registration secures any obligation owed by a debtor to the secured party; or

2. An amendment to omit the collateral, because particular collateral in which the person has an interest does not secure any obligation owed by a debtor to the secured party.

You will find a precedent Amendment Demand on the matter plan. If the secured party is a deregistered company, a copy of the amendment demand should be sent to:

ASIC Property Law Group

GPO Box 9827

Brisbane QLD 4001.

The secured party may then respond.

Step 2 – Providing amendment statement to the Registrar

If five business days have passed since the amendment demand was given and the secured party has not responded, or the secured party disagrees with the amendment demand, an amendment statement can be provided to the Registrar.

An amendment statement must be in the approved form and addressed to:

Personal Property Securities

Australian Financial Security Authority

National Service Centre

GPO Box 1944

Adelaide SA 5001

Step 3 – Registrar to give notice to secured party

Following receipt of a complete amendment statement, the Registrar will give an amendment notice to the secured party. The amendment notice sets out the amendment demanded and invites the secured party to respond with the reasons why the amendment is unauthorised. The secured party may respond within five business days after the notice is given, or a longer period approved by the Registrar.

In general, the Registrar will not issue an amendment notice unless the Registrar has received an amendment statement. However, the Registrar may issue an amendment notice if there is evidence that an amendment demand has been given to the secured party and the Registrar suspects on reasonable grounds that the amendment is authorised.

Step 4 – Registering financing change statement

As per s 181 of the Act, at the end of the response period the Registrar must register a financing change statement to amend the registration in accordance with the amendment demand, unless the Registrar suspects on reasonable grounds that the amendment is unauthorised.

However, the Registrar will not take any action under s 181, if the administrative process has stopped being available, that is if:

1. The registration is amended (including removed) in accordance with the amendment demanded; or

2. Proceedings come before a court that are related to the amendment demanded.

Judicial process

As an alternative to the administrative process, s 182 of the Act allows for either the secured party or the person who made the amendment demand to apply to the court for an order relating to an amendment demand.

Regards

Mentor