Searching the Personal Property Securities Register

The Personal Properties Securities Register (PPSR) is a national, online register of security interests in personal property (not interests in land). The Personal Property Securities Regulations 2010 (PPS Regulations) governs the PPSR. Practitioners can use the PPSR to find out whether an individual or organisation has a security interest attached to their personal property. PPSR searches are typically carried out where someone is purchasing second-hand goods, including as part of a business acquisition, or lending money. A search provides a PPSR search certificate, which is a legal record of all the security interests registered on the PPSR against the identifier used in the search.

A common mistake made by practitioners in relation to the PPS regime is failing to search the PPSR or conducting deficient searches. Such errors pose a risk for practitioners and their clients, as they can result in registered security interests being missed during the due diligence stage of a transaction. Practitioners should be diligent when conducting PPSR searching and may need to make multiple searches in different ways for a complete result.

The important thing to remember when searching for security interests registered on the PPRS is that there are different types of searches, and accuracy in the search terms is crucial. Attempts should be made to obtain prescribed source documents to verify the required details for an individual before carrying out a search. It may be necessary to carry out multiple searches, using different identifiers, to ensure that a registration is not missed.

The PPSR has several search options, depending on the legal and factual context. Nonetheless, the two primary methods of searching the PPSR are a serial number search and a grantor search.

The requirements for searching the PPSR are strict. In the matter of OneSteel Manufacturing Pty Ltd [2017] NSWSC 21, the Court held that an equipment lease was imperfectly registered because the grantor was identified using its ABN instead of its ACN, in breach of the PPS Regulations. The judgment confirms that the PPSR mandates the use of certain prescribed information in the PPS Regulations because it is an exact match system. A search will only disclose security interests registered against the identifier that has been provided. Accordingly, it is often advisable to do both a serial number and a grantor search, using multiple possible identifiers.

A serial number search is used when collateral (personal property used as security) is required, or permitted, to be described by a serial number (Clause 2.2 of Schedule 1, PPS Regulations). Common examples of serial numbered personal property include motor vehicles, aircraft, watercraft and some intellectual property rights. The serial number of a motor vehicle is its VIN or chassis number.

A serial number search may not capture all security interests. For example, if the interest was registered against the grantor but not the serial number. Further, some goods or equipment are not considered “serial numbered goods” and are instead registered as “other goods’” (Clause 2.3 of Schedule 1, PPS Regulations). These must be searched for using the grantor’s details.

A grantor search is used when the collateral is unable to be searched for by serial number, because it is non-serial numbered personal property. Common examples of non-serial numbered property include machinery and equipment, crops, livestock and shares. The grantor owns or has an interest in the personal property to which a security interest is attached and may be an individual or an organisation.

An individual grantor search is used to find out if there are security interests registered against an individual’s personal property. An individual includes a sole trader with an ABN, a partner in a partnership that does not have an ABN and a trustee of a trust that does not have an ABN. Notably, an individual search requires having an authorised search purpose (Section 172 PPS Act).

An individual search requires the individual’s full name, with the exact spelling, and date of birth. Clause 1.2 of Schedule 1 of the PPS Regulations prescribes a hierarchy for the source of details to be used for the registration.

The search criteria must exactly match the grantor's details. For example, if the search criteria omits the grantor's second given name, a PPSR search will return no result, even if there is a registration for the grantor. Ideally, the search should be made using the grantor's details obtained from a copy of the highest-ranking source documents prescribed by the PPS Regulations (Schedule 1). Typically, that will be a current driver's licence. However, practitioners should be aware that in Victoria a driver's licence does not record second and subsequent given names, only initials, unlike in other jurisdictions. In that event, searches should also be made using the given names on another prescribed source document.

Situations where more than one search may be required include where the individual: has been identified by a secured party using information they hold under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, has changed their name, is in a partnership or is part of a trust.

An organisation grantor search can be used to find out if someone has already registered an interest over the organisation’s assets. Organisations include companies, bodies corporate, a partner in a partnership with an Australian Business Number (ABN), bodies politic and a trustee of a trust with an ABN.

Organisations are searched using their identifiers. As organisations often have more than one identifier, searching the PPSR requires using the identifier the organisation has that is considered the highest-ranking according to the PPS Regulations (Schedule 1.3).

Where a grantor is a company, registration of the security interest is usually made using its ACN, but that is not always the case. An example of this is where the company is a responsible entity of a registered scheme with an ASRN, in which case the ASRN is used.

Where a grantor is a partner, trading trust or body politic, the detail used for registration is typically an ABN, where one exists (Clauses 1.4 to 1.6 of Schedule 1, PPS Regulations). Otherwise, a search must be undertaken by reference to the details of the grantor. If a company grants a security interest as a partner or trustee, but not as a responsible entity, it is likely that the registration will be effected under the ABN of the trust or partnership, not under the company's ACN.

Situations where more than one search, or an individual grantor search, may be required include where the organisation has more than one identifier, is a partnership or trust without an ABN, is a sole trader with an ABN or has changed its name.

The important thing to remember when searching for security interests registered on the PPSR is that there are different types of searches, and accuracy in the search terms is crucial. Attempts should be made to obtain prescribed source documents to verify the required details for an individual before carrying out a search. It may be necessary to carry out multiple searches, using different identifiers, to ensure that a registration is not missed.

Authored with assistance from Scott Krischock and Sue Campbell, Colin Biggers & Paisley.