When registering a security interest on the Personal Property Securities Register  (the PPSR) it is important to take great care when identifying the grantor (the person who has the interest in the personal property to which a security interest is attached).   Errors such as identifying the grantor company by its ABN and not its ACN could render the registration ineffective and cause the rights in the security interest to be lost.

A recent ruling by the NSW Supreme Court shows just how costly the simple mistake of using an ABN instead of an ACN on the PPSR can be. In this case Alleasing had leased an ore crushing plant to OneSteel.  Alleasing paid $23 million for the design, supply and installation of the crusher.  Alleasing registered its security rights in the ore crusher on the PPSR but an employee of Alleasing used OneSteel’s ABN and not ACN on the registration.  The Court held that the “registrations were defective” and  “The defect was such that searchers using one of the authorised modes of search would not discover the registration.  This renders the defect seriously misleading, and so the registrations were ineffective pursuant to s164(1)(a)….”   The result of this ruling was that Alleasing lost its rights in the ore crusher. One expensive $23 million mistake!

So when should an ACN or an ABN should be used?  If the grantor entered the agreement as a trustee of a trust which holds an ABN, the ABN should be recorded on the register.  If the grantor entered the agreement in its own corporate capacity, the company’s ACN should be recorded.

Given that a security interest in personal property can be lost if the grantor is not correctly identified on the PPSR, we recommend you have a lawyer undertake the registration of a security interest.  This will ensure the grantor is correctly identified and the security interest is valid.


This article is for general information only and not legal advice. Legal advice should be obtained before taking  any action or otherwise rely upon the content of this article in any way. This article was prepared on 28 February 2017 and has not been revised to account for any changes in the law since that time.