direct resolution between the parties through an exchange of an amendment demand
an administrative process for an amendment demand
a judicial process for an amendment demand.
Ideally most disputes should be resolved directly between the parties. For this reason, the administrative or judicial process cannot be commenced until the relevant notice periods have elapsed after the amendment demand has been issued.
The decision to commence an administrative or judicial process is ultimately a matter of cost and time, as the administrative process is currently free but takes longer (as it involves a number of further steps before I (or my delegate) can make a decision. There is a cost associated with making the application to the court, but greater capacity for a decision to be made more quickly. Further information in relation to amendment demands can be found in the Registrar’s Practice Statement No 4.
A further consideration in matters where there is a genuine dispute between the parties, is that the administrative process involves a test that favours the secured party. The Registrar need only ‘suspect on reasonable grounds’ that the amendment demanded is not authorised by the Act to leave a registration in place. If a decision is reviewed by the Administrative Appeals Tribunal it applies this test too. Furthermore, unlike a court, there are limited opportunities for the evidence to be tested under the administrative process.
Last financial year we received 1363 amendment statements from applicants seeking resolution of their dispute via the administrative process. Of these, around 738 were discontinued, either because the application was invalid, the secured party complied with the demand, or one of the parties brought the matter before a court.
For applications that went through to a decision, around 90% were decisions to remove and or amend the registration. Around 10% of decisions were to not remove or amend the registration.
Regardless of the process chosen (direct, administrative or judicial), an efficient well administered amendment demand process is an important element of any effective security interest register, as it provides a safety valve to not only preserve the rights and interests of parties to a registration, but also helps to ensure that the registration is an accurate record of what has been agreed between the parties.