PPSR error leads to $23million loss and confirms the courts view that form trumps function

An apparently simple administrative error in a PPSR registration has resulted in a significant financial loss for a lessor.

In In the matter of OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21 the court ruled that an administrative error which saw the lessor provide the ABN of the lessee (instead of the lessee's ACN) was sufficiently material to render the PPSR registration defective. As a result, the registration was not validly perfected and the lessor's interest in the equipment, worth some $23million, vested in the lessee.

The background

The facts of the case which were not in dispute are:

1. In October 2014, Alleasing Pty Limited (Alleasing) leased equipment worth around $23million to OneSteel Manufacturing Pty Limited (OneSteel).