Ten months late, but not too late

The Federal Court of Australia has granted AMAL Security Services Pty Limited relief from the consequences of a nearly ten-month delay in registering security interests on the Personal Property Securities Register (PPSR), finding that the failure resulted from inadvertence by the party responsible for registration. Justice Jackman exercised the Court's discretion under section 588FM of the Corporations Act 2001 to extend the registration deadline, while preserving the rights of any external administrator subsequently appointed to the grantor. The decision confirms that even a substantial registration delay can be excused where the failure arises from inadvertence and is promptly corrected once discovered. It also demonstrates the Court's willingness to grant relief notwithstanding an absence of evidence about the grantor's solvency, provided appropriate protections are retained for creditors and future external administrators.

AMAL, acting as trustee of the Grand Liverpool Security Trust, held security granted by The APF Custody Company Pty Ltd (APF) in connection with a financing arrangement ultimately secured against a property at 402 Macquarie Street in Liverpool, New South Wales. Under the arrangement, a third-party manager was responsible for registering AMAL's security interests on the PPSR. Although the interests arose on 4 August 2025 and were required to be registered within 20 business days, the necessary PPSR registrations were not completed until June 2026.

The oversight came to light when Clayton Utz, acting for AMAL, notified the security trustee that the registrations had not been effected. AMAL immediately instructed that financing statements be registered on the PPSR. Evidence before the Court established that AMAL had assumed the manager would fulfil its contractual registration obligations and had not independently verified compliance, consistent with its usual procedures. Justice Jackman accepted that the failure was attributable to innocent error or oversight by the manager rather than any deliberate decision to leave the interests unregistered.

Section 588FM permits the Court to fix a later registration time where a failure to register was accidental or inadvertent, where creditors or shareholders would not be prejudiced, or where relief is otherwise just and equitable. Justice Jackman observed that inadvertence encompasses human error, oversight and a failure to be properly attentive. Although the approximately ten-month delay was substantial, the Court considered AMAL's prompt action once the omission was discovered to be significant.

The Court also considered the potential impact on creditors in any subsequent insolvency of APF. There was no evidence before the Court concerning APF's financial position, although AMAL disclosed that the borrower under the underlying loan had failed to discharge its obligations and that receivers had been appointed to that borrower. Justice Jackman found that the interests of potentially affected parties could be adequately protected by allowing any future liquidator, administrator or deed administrator of APF to apply to vary or discharge the order.

APF, represented in correspondence by Murfett Legal, did not oppose the application and elected not to appear at the hearing. The Court regarded that position as a further factor supporting relief. No other security interests had been registered against APF as grantor.

Justice Jackman fixed 25 June 2026 as the later registration time for the purposes of section 588FL, addressing the risk that the security interests could otherwise vest in APF upon a relevant insolvency event. The order expressly permits any external administrator appointed in connection with an insolvency occurring within six months of that date to seek its variation or discharge. No order was made as to costs.

Read the decision here.

John Anderson of 9 Selborne Chambers, instructed by Clayton Utz, appeared for AMAL. APF did not appear.