Litigation and Dispute Resolution

Federal Court Records First Civil Penalty for Misuse of the PPSR

8 May, 2024

In Registrar of Personal Property Securities v Brookfield [2024] FCA 29, the Federal Court of Australia has recorded the first civil penalty for improper registration on the Personal Property Securities Register (PPSR) since the register was established in 2012.

The PPSR is a public register of security interests in personal property in Australia. A security interest is an interest in personal property provided for by a transaction that secures payment or performance of an obligation, for example a fixed and floating charge and a hire purchase agreement.

Key Takeaways

  • Invalid registrations on the PPSR may result in a monetary penalty imposed by the Court under section 151 of the Personal Property Securities Act 2009 (Cth) (PPSA)
  • The test for whether a registration on the PPSR is invalid is an objective test having regard to whether a person believes on reasonable grounds that the secured party described on the register is, or will become, a secured party in relation to secured property
  • The facts in Brookfield suggest that the Registrar of Personal Property Securities may seek a monetary penalty in circumstances where there has been repeated and substantially identical invalid registrations on the PPSR following warnings from the Registrar that the registrations were invalid


In October 2016, Blueprop Pty Ltd purported to assign to Mr Brookfield its rights and obligations in a ‘Rent Roll Sale and Purchase Agreement‘ with Real Estate Now Pty Ltd. Following the assignment, Mr Brookfield alleged that Real Estate Now owed him a debt under the Agreement for its purchase of the rent roll.

Between March 2016 and March 2019, Mr Brookfield registered 7 financing statements on the PPSR in substantially the same terms in respect of a security interest he claimed had been granted by Real Estate Now under the Agreement. In support of each of the registrations, Mr Brookfield supplied the Agreement as evidence and identified the property secured by the registrations variously as “commercial property”, “consumer property”, and the rent roll debt arising under the Agreement.

All 7 registrations were removed by the Deputy Registrar of Personal Property Securities after giving notice to Mr Brookfield that the Agreement did not appear to grant any security interest to him. Despite this, Mr Brookfield registered 2 further financing statements on 4 February 2020 and 25 May 2022, both of which were in similar terms to the earlier registrations and therefore were also removed by the Deputy Registrar.

The Registrar applied to the Federal Court of Australia for declarations of contraventions of the PPSA as well as a monetary penalty in respect of Mr Brookfield’s registrations made on 4 February 2020 and 25 May 2022.


The Federal Court reviewed the Agreement and found that it did not grant a security interest to Mr Brookfield and further that it expressly disavowed the existence of any security interest in clause 3.1 where it provided that the purchase of the rent roll by Real Estate Now was to be “free from any Security Interest“.

The Court also found that in any event it appeared that the Agreement was not properly assigned by Blueprop to Mr Brookfield in the first place because it was a condition of an effective assignment that Blueprop must seek the prior consent of Real Estate Now which it had not done.

The Federal Court held that although Mr Brookfield believed he was or would become a secured party in respect of the property referred to in the financing statements, he did not have any reasonable grounds for this belief and therefore had breached section 151(1) of the PPSA.

Section 151(1) of the PPSA provides that a person must not apply to register a financing statement, or a financing change statement, that describes collateral, unless the person believes on reasonable grounds that the person described in the statement as the secured party is, or will become, a secured party in relation to the collateral (otherwise than by virtue of the registration itself).

The Court held further that Mr Brookfield had breached section 151(2) of the PPSA by failing to apply to register a financing change statement to amend the registrations to end their effect as soon as practicable or within 5 business days after the statement was registered in circumstances where he did not have reasonable grounds for registering the statement.

The Court imposed a $30,000 penalty against Mr Brookfield for the two contraventions after considering all of the circumstances and determining that a maximum penalty of $315,900 may be imposed. The Court stated that a penalty for serious contraventions of the PPSA should be significant enough to pose a real deterrent to those who may seek to use the PPSR for inappropriate purposes.


McCabes has extensive experience in matters involving the Personal Property Securities Act.  Please do not hesitate to contact us if you require advice or assistance.

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