Macquarie Leasing v The Registrar of the Personal Property Securities Register [2015] NSWSC 94

Supreme Court New South Wales

Medium Neutral Citation: Macquarie Leasing v The Registrar of the Personal Property Securities Register [2015] NSWSC 94 Hearing dates: 16 February 2015 Decision date: 16 February 2015 Jurisdiction: Equity Division Before: McDougall J Decision: Order removal of registration of charges. Catchwords: EQUITY – interests - Personal Property Securities Register - frivolous recording of interests on the Register - where registrations frustrated completion of sale of vehicle - multiple occurrences - order to remove registration - further ambulatory order that any subsequent registrations be removed at plaintiff's request to the Registrar Legislation Cited: Personal Property Securities Act 2009 (Cth) Category: Principal judgment Parties: Macquarie Leasing Pty Limited (Plaintiff) The Registrar of the Personal Property Securities Register (First Defendant) Australia Keg Company Pty Ltd (Second Defendant) Pro-Act Australia Pty Ltd (Third Defendant) Representation: Counsel: E K Glover (Plaintiff)

Solicitors: Douros Lawyers (Plaintiff) File Number(s): 2014/335243

Judgment (ex tempore – revised 16 february 2015) 1. HIS HONOUR: On 5 August 2008, the plaintiff took a chattel mortgage from Elite Grains Pty Limited over a prime mover. The chattel mortgage was registered as a company charge in the manner then appropriate. When the Personal Property Securities Act 2009 (Cth) commenced in operation, the plaintiff caused its interest to be recorded in the Personal Property Securities Register (PPSR) established by that Act. The mortgagor made default. The plaintiff terminated the security agreement and demanded return of the prime mover. 2. Ultimately, the plaintiff commenced proceedings against Elite Grains. Those proceedings were concluded and the plaintiff recovered a judgment. Thereafter, it repossessed the prime mover. The liquidator of Elite Grains has disclaimed any interest in the prime mover. The plaintiff caused the prime mover to be sold at public auction, held as long ago as 6 August 2014. Settlement of that sale was thwarted because a company known as DEQMO Pty Limited had registered a security interest against the prime mover on the PPSR. 3. On 17 October 2014, Rein J declared that the security interest asserted by DEQMO was void and of no effect. He directed the Registrar of the PPSR forthwith, in effect, to remove the claimed security interest, and restrained DEQMO and its director, Mr Rodney Culleton, who appears to be the human entity behind the various attempts to thwart the plaintiff's enforcement of its rights, from registering any further claimed interest on the PPSR. 4. Undeterred by that, the second defendant in these proceedings, Australian Keg Company Pty Limited, registered a further security interest, and a company known as Pro-Act Australia Pty Limited also registered a security interest. 5. On 25 November 2014, Stevenson J heard an application for removal of those security interests and for appropriate orders against the registration by those parties of further interest. His Honour made those orders. 6. After his Honour had made those orders, a further security interest was registered by an unnamed individual. The grantor of that interest was said to be Australian Keg Co. 7. On 9 February 2015, Bergin CJ in Eq ordered the Registrar of the PPSR in effect to remove the offending registrations. The Registrar did so. However, after her Honour made those orders, yet a further security interest was registered. The purported secured party has been shown by reason of searches using its ACN number to be a non-existent corporate entity. 8. The plaintiff now seeks orders for the removal of the security interest registered (or purported to be) by the non-existent purported secured party. 9. As I said, the prime mover has been sold by public auction. The auctioneer holds cleared funds in its trust account. The purchaser is prepared to proceed to settlement as soon as the PPSR can be cleared. The purchaser is not in need of finance, and hence there is no present need to register a further security interest over the prime mover. 10. It is clear that the various steps to which I have referred have been undertaken with the intent (and effect) of thwarting the plaintiff's enforcement of its rights as a secured party over the prime mover. It is equally apparent, since the plaintiff was the holder of the first-created secured interest and had priority by reason of registration, that the purported subsequent grants of security interests must be ineffective. 11. The ability of debtors (and no doubt others) to thwart implementation of rights in the manner that appears to have happened is a matter of some concern. It appears to occur because, to enable the PPSR to function, it is accessible on-line twenty-four hours a day, 365 days a year. Anyone can access the PPSR at any time and register a security interest. No human intervention is required to do so. The requirement for full-time public availability means inevitably that there is scope for mischief of the kind that appears to have happened in this case. 12. In those circumstances, the plaintiff, in conjunction with the Registrar of the PPSR (who is the first defendant), seeks orders, firstly, in effect removing the registration of the current security interest registered in favour of the non-existent entity and, secondly, an ambulatory order directing the Registrar forthwith to remove any subsequent interest that might be registered. 13. The second order is sought up until 12 noon tomorrow on the basis that if it is made, the Registrar will apply it and the plaintiff will finally be able to complete its sale. The plaintiff will receive the moneys to which it is entitled under that sale and the purchaser will receive clear title to the prime mover. 14. I am satisfied that, to the extent possible, those who might be affected by the orders have been notified by email of the plaintiff's intention to seek them today. The matter was called outside court at 10am. There was no appearance. 15. I am satisfied on the basis of the evidence which proves the matters I have briefly summarised that the plaintiff is entitled to an order in effect that the subsequent registration be removed, and that any further attempt to register a security interest be removed. That the plaintiff is entitled to the first such order is clear. 16. The plaintiff makes good its entitlement to the second such order because it is, in effect, a first registered mortgagee and any subsequent registration could not as a matter of principle affect the plaintiff's exercise of its rights. 17. The plaintiff and the first defendant have agreed on the form of orders that should be made in effect to clear the register and to enable the plaintiff to complete its sale. I will make those orders in a moment. 18. In addition, the plaintiff seeks costs against the second defendant, Australian Keg Co. That company appears to be the promoter of the mischief that has occurred. Accordingly, whilst I entertain very grave doubts that making the order will give the plaintiff any practical joy, I am prepared to do so. 19. I make orders in accordance with paras 1 to 3 of the short minutes of order, initialled by me and dated today's date. 20. I direct that the orders be entered forthwith.