Registrar's Practice Statement No 3

1. Investigations, Civil Penalties and Enforceable Undertakings

Version 1.2


Release Date: 8 June 2012
Updated: 22 August 2013


2. Background and Purpose

The Personal Property Securities Register (PPSR) is an online register, which allows parties to make registrations in respect of security interests in personal property and other prescribed personal property. The Registrar of Personal Property Securities (Registrar) is responsible for establishing and maintaining PPSR.

The Personal Property Securities Act 2009 (Cth) (PPS Act) outlines a number of civil penalty provisions. For example, section 172 of the PPS Act stipulates that a person may only conduct a search on an individual grantor if the person is conducting that search for an "authorised purpose", as set out in that section. In accordance with subsection 172(3) of the PPS Act, a person who contravenes section 172 of the PPS Act may be liable to pay a civil penalty.

The Registrar may apply to the Federal Court of Australia for an order for the payment of a civil penalty for a serious breach of a civil penalty provision. The Registrar may also accept a written undertaking from a person who has contravened a civil penalty provision.

The PPS Act permits the Registrar to conduct an investigation into any matter for the purpose of performing the Registrar's functions. This includes, but is not limited to, any suspected or alleged contraventions of a civil penalty provision. To assist the Registrar to conduct an investigation into any matter, sub-section 195A(2) provides that the Registrar may, by written notice, require a person to give any information that the Registrar believes is relevant to such an investigation.

This practice statement provides guidance as to how the Registrar will exercise his or her powers in relation to investigations, 195A notices, civil penalty provisions, and enforceable undertakings under the PPS Act.

3. Investigations

Subsection 195A(1) of the PPS Act provides that the Registrar is permitted to conduct an investigation into any matter for the purpose of performing the Registrar's functions. There are a number of ways in which it may come to the Registrar's attention that a matter may require investigation. This includes, for example, as a result of the administrative process for an amendment demand, or the receipt of an Application to Remove Data or Correct Registration Errors. If a member of the public considers that there is a matter that should be investigated, they should complete a PPS Enforcement Referral letter. A template letter is at Attachment A to this practice statement.

There are a number of methods of investigation that the Registrar may employ in investigating a matter. For example pursuant to subsection 172(2), table item 11, the Registrar is authorised to search the PPSR for any purposes that relates to the administration of the PPS Act. The Registrar is also empowered under section 195A to issue a written notice to a person requiring that person to provide information to the Registrar.

4. 195A Notice

The Registrar may issue a written notice pursuant to subsection 195A(2) of the PPS Act (195A Notice) requiring the person to provide such information as specified in the notice, if the Registrar believes on reasonable grounds that a person has information that is relevant to an investigation of a matter under the PPS Act.

Failure to comply with a 195A Notice is a civil penalty provision which may result in the Registrar applying to the Federal Court of Australia for a pecuniary penalty order. The provision of false or misleading information in response to a 195A Notice may result in a criminal prosecution pursuant to subsection 137.1 of the Criminal Code. Matters arising as a result of investigations may also be referred to a more appropriate law enforcement agency, such as the Australian Federal Police. A sample 195A Notice is attached to this practice statement at Attachment B.

In circumstances where the Registrar gives a 195A Notice to a secured party in respect of a registration, the Registrar will address the notice to the address for service specified in the registration and give it to the secured party by:

  1. leaving it at the address;
  2. sending it by pre-paid post; or
  3. sending it by fax or by email.

Where there is more than one secured party, the Registrar may give the 195A Notice to each secured party by giving a single 195A Notice as set out above. In such circumstance the 195A Notice will name each of the secured parties to whom the notice is addressed. Upon receipt of a 195A notice that is addressed to multiple secured parties, the parties may elect to respond to the notice on an individual basis or collectively. If the parties elect to respond collectively, each party must sign the response. If the response is not signed by any particular party, the Registrar may consider that party has not complied with section 195A of the PPS Act (see further below).

5. Civil Penalty Provisions

The PPS Act provides for several civil penalty provisions, namely:

  1. Subsection 151(1) - Application to register a financing statement or financing change statement without the belief, based 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.
  2. Subsection 151(2) - Failure to apply for the withdrawal of a registration where the person described in the statement is, or there are reasonable grounds to believe, not a secured party.
  3. Subsection 172(3) - Unlawful access of the PPSR or the unlawful use of PPSR data.
  4. Subsection 195A(4) - Failure to comply with a 195A Notice issued pursuant to subsection 195A(2) of the Act.

The Registrar may apply to the Federal Court of Australia for an order for payment of a pecuniary penalty for a contravention of a civil penalty provision of the Act. The Registrar will only apply to Court for such an order if the Registrar is considers that the contravention was serious. An order requiring a person to pay a pecuniary penalty is payable to the Commonwealth of Australia and the Commonwealth may actively enforce the order as if it were a judgment of the Court.

In addition to the civil penalty provisions outlined above, the notes to the PPS Act make numerous references to particular provisions in the Criminal Code. For example, subsection 137.1 of the Criminal Code deals with the giving of false and misleading information. If the Registrar considers that criminal prosecution may be warranted, the matter may be referred to the Office of the Commonwealth Director of Public Prosecutions or to appropriate law enforcement agencies such as the Australian Federal Police.

6. Enforceable Undertaking

Pursuant to section 230 of the PPS Act, the Registrar may accept a written undertaking given by a person in relation to that action, in which the person undertakes to pay a specified amount to the Commonwealth within a specified period. Attachment C to this practice statement provides a template for an enforceable undertaking.

A person who wishes to enter into an enforceable undertaking pursuant to subsection 230(2) of the PPS Act should first discuss it with the Registrar's delegate assigned to the matter.

The Registrar will only consider accepting an enforceable undertaking where:

  1. The Registrar considers that a contravention of a civil penalty provision of the Act has occurred.
  2. It is in the public interest, and appropriate in all circumstances, to resolve the matter through an enforceable undertaking.
  3. The alleged contravention has been admitted to by the person. The Registrar will not accept an enforceable undertaking:
  4. instead of commencing criminal proceedings against the party; or
  5. if the undertaking:
    1. does not detail of the misconduct that gave rise to the enforceable undertaking;
    2. contains any confidentiality clause;
    3. contains any clause denying responsibility; or
    4. contains any clause that suggest defences for possible non-compliance with the enforceable undertaking.

A decision to accept or reject the offer of an enforceable undertaking remains at the discretion of the Registrar. The acceptance of an enforceable undertaking in a particular set of circumstances does not create a binding precedent for future action.

Once an enforceable undertaking has been entered into the person who has given the undertaking may withdraw or vary the undertaking, but only with the Registrar's permission.

If the Registrar considers that a person who gave an undertaking has breached any of the conditions of the undertaking, the Registrar may apply to the Federal Court for an order which:

  1. directs the person to comply with the terms of the undertaking; or
  2. any other order the Court considers appropriate.

7. Recovery of Court Ordered Costs

In general, the Registrar will actively pursue the recovery of court costs awarded in the Registrar's favour as a result of any litigation. This includes litigation in respect of contraventions of the PPS Act including the enforcement of civil penalty provisions.

8. Further information

Enquiries about any information contained in this practice statement may be directed via email to enquiries@ppsr.gov.au.

9. Attachment A - PPS Enforcement Referral Letter

Asst. Business Manager
PPS Enforcement
GPO Box 1944
Adelaide SA 5001

Via email enquiries@ppsr.gov.au

PPS ENFORCEMENT REFERRAL

The following details are submitted for your consideration:

Contravening party

Name
(If applicable, include ACN/ABN)

Date of birth
(If applicable)

Address

Telephone/email

Affected party (if applicable)

Name
(If applicable, include ACN/ABN)

Date of birth
(If applicable)

Address

Telephone/email

Property details (if applicable)

PPS Registration number

Description of property
(collateral) affected

NEVDIS details

NB. If applicable, attached a copy of a relevant search certificate

Referrer's details (mandatory)

Name
(If applicable, include ACN/ABN)

Address

Telephone

Email address

Section(s) contravened
(If known, quote the subsection of the Personal Property Securities Act which has been allegedly contravened)

Details of allegation
(Set out, in chronological order, the facts of the allegation including dates, how the contravention was identified, any events leading to and surrounding allegation etc...)

Other comments

Signed _____________________

 

(Print Name)

Date:

10. Attachment B - Template 195A Notice

NOTICE PURSUANT TO SECTION 195A of the

Personal Property Securities Act 2009

Our Ref:
RE: [Matter Name]

[Name of recipient]
[Contact Name (if applicable)]
[Address of recipient line 1]
[Address of recipient line 2]
[Suburb State Postcode]

I, [name of delegated officer] as delegate of the Registrar of Personal Property Securities and in accordance with subsection 195A(2) of the Personal Property Securities Act 2009 (PPS Act), require you to provide me with information as specified in the attached schedule.

To comply with this notice you must provide the information within 21 days of the date of this notice to the Registrar of Personal Properties Securities via post or email to:

Post: Delegate of the Registrar of Personal Property Securities
GPO Box 1944
Adelaide SA 5001
Email: enquiries@ppsr.gov.au

The information you are required to produce relates to an investigation pursuant to section 195A of the PPS Act.

Failure to comply with this notice may, upon conviction, render an individual liable to a civil penalty of $5,500, or for a body corporate $27,500, pursuant to subsection 195A(4) of the PPS Act.

Providing false or misleading information in purported compliance with a notice issued pursuant to subsection 195A(2) of the PPS Act is a serious offence. Upon conviction, you may be liable to a term of imprisonment for 12 months pursuant to subsection 137.1 of the Criminal Code (Cth) and/or a pecuniary penalty of up to $6,600, pursuant subsection 4B(2) of the Crimes Act 1914 (Cth).

If you are a body corporate and you provide false or misleading information in purported compliance with this notice you may, upon conviction, be rendered liable to a pecuniary penalty of $33,000 pursuant to subsection 4B(3) of the Crimes Act 1914 (Cth).

In addition, engaging in conduct that obstructs, hinders, intimidates or resists the Registrar of Personal Property Securities or his or her delegate (a "Commonwealth public official" for the purposes of the Criminal Code Act 1995 (Cth)) in the performance of his or her functions under this Act, may render you liable to a term of imprisonment for 2 years and/or a fine of $13,200, pursuant to subsection 149.1 of the Criminal Code Act 1995 (Cth) and subsection 4B(2) of the Crimes Act 1914 (Cth).

A claim of client legal privilege in respect of any information sought in the attached schedule does not excuse its production. Should a claim for client legal privilege be made, you should contact me immediately to make arrangements for production of the information in a sealed or protected form so the claim can be determined in a court of law.

Copies of section 195A of the Personal Properties Securities Act 2009 (Cth), and sections 137.1 and 149.1 of the Criminal Code Act 1995 (Cth) and section 4B of the Crimes Act 1914 (Cth) are attached for your reference.

Dated this [date] day of [month year]

[Name of investigating delegate]
Delegate of the Registrar of Personal Properties
Telephone:
Facsimile:
E-mail:

SCHEDULE TO SECTION 195A NOTICE
Dated this [date] day of [month year]

INFORMATION TO BE PROVIDED

  • [List required information]

 

If you are unable to provide the information as required by this notice you must contact the delegate name in the Notice before the due date and advise as to the reason/s why you cannot comply.

Personal Property Security Act 2009 (Cth)

Section 195A Registrar - Investigations

  1. The Registrar may conduct an investigation into any matter for the purpose of performing his or her functions.
  2. If the Registrar believes on reasonable grounds that a person has information that is relevant to an investigation under subsection (1), the Registrar may, by written notice given to the person, require the person to give any such information to the Registrar, within the period and in the way specified in the notice.
  3. The period specified in a notice under subsection (2) must be at least 14 days after the notice is given.
  4. A person contravenes this subsection if:
    1. the person has been given a notice under subsection (2); and
    2. the person fails to comply with the notice.

    Civil penalty:

    1. for an individual-50 penalty units;
    2. for a body corporate-250 penalty units. Note: See Part 6.3 (Civil penalty proceedings).
  5. A notice under subsection (2) of this section must set out the effect of the following provisions:
    1. subsection (4) of this section;
    2. section 137.1 of the Criminal Code (giving false or misleading information).
  6. Despite subsection (2), the Registrar cannot give a notice under that subsection to:
    1. the Commonwealth, a State or a Territory; or
    2. an officer or agency of the Commonwealth, a State or a Territory.

Criminal Code Act 1995 (Cth)

Section 137.1 False or misleading information

  1. A person is guilty of an offence if:
  1. the person gives information to another person; and
  2. the person does so knowing that the information:
    1. is false or misleading; or
    2. omits any matter or thing without which the information is misleading; and
  3. any of the following subparagraphs applies:
    1. the information is given to a Commonwealth entity;
    2. the information is given to a person who is exercising powers or performing functions under, or in connection with, a law of the Commonwealth
    3. the information is given in compliance or purported compliance with a law of the Commonwealth.

    Penalty: Imprisonment for 12 months.

(1A) Absolute liability applies to each of the subparagraph (1)(c)(i), (ii) and (iii) elements of the offence.

(2) Subsection (1) does not apply as a result of subparagraph (1)(b)(i) if the information is not false or misleading in a material particular.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2). See subsection 13.3(3).

(3) Subsection (1) does not apply as a result of subparagraph (1)(b)(ii) if the information did not omit any matter or thing without which the information is misleading in a material particular.

Note: A defendant bears an evidential burden in relation to the matter in subsection (3). See subsection 13.3(3).

(4) Subsection (1) does not apply as a result of subparagraph (1)(c)(i) if, before the information was given by a person to the Commonwealth entity, the Commonwealth entity did not take reasonable steps to inform the person of the existence of the offence against subsection (1).

Note: A defendant bears an evidential burden in relation to the matter in subsection (4). See subsection 13.3(3).

(5) Subsection (1) does not apply as a result of subparagraph (1)(c)(ii) if, before the information was given by a person (the first person) to the person mentioned in that subparagraph (the second person), the second person did not take reasonable steps to inform the first person of the existence of the offence against subsection (1).

Note: A defendant bears an evidential burden in relation to the matter in subsection (5). See subsection 13.3(3).

(6) For the purposes of subsections (4) and (5), it is sufficient if the following form of words is used:

"Giving false or misleading information is a serious offence".

Section 149.1 Obstruction of Commonwealth public officials

  1. A person is guilty of an offence if:
    1. the person knows that another person is a public official; and
    2. the first-mentioned person obstructs, hinders, intimidates or resists the official in the performance of the official's functions; and
    3. the official is a Commonwealth public official; and
    4. the functions are functions as a Commonwealth public official. Penalty: Imprisonment for 2 years.
  2. In a prosecution for an offence against subsection (1), it is not necessary to prove that the defendant knew:
    1. that the official was a Commonwealth public official; or
    2. that the functions were functions as a Commonwealth public official.
  3. For the purposes of this section, it is immaterial whether the defendant was aware that the public official was performing the official's functions.
  4. Section 15.3 (extended geographical jurisdiction--category C) applies to an offence against subsection (1).
  5. The definition of duty in section 130.1 does not apply to this section.
  6. In this section: "function" :
    1. in relation to a person who is a public official--means any authority, duty, function or power that is conferred on the person as a public official; or
    2. in relation to a person who is a Commonwealth public official--means any authority, duty, function or power that is conferred on the person as a Commonwealth public official.

CRIMES ACT 1914 (Cth)
Section 4B -Pecuniary penalties--natural persons and bodies corporate

  1. A provision of a law of the Commonwealth relating to indictable offences or summary offences shall, unless the contrary intention appears, be deemed to refer to bodies corporate as well as to natural persons.
  2. Where a natural person is convicted of an offence against a law of the Commonwealth punishable by imprisonment only, the court may, if the contrary intention does not appear and the court thinks it appropriate in all the circumstances of the case, impose, instead of, or in addition to, a penalty of imprisonment, a pecuniary penalty not exceeding the number of penalty units calculated using the formula:

Term of Imprisonment x 5

where:
"Term of Imprisonment" is the maximum term of imprisonment, expressed in months, by which the offence is punishable.

(2A) Where a natural person is convicted of an offence against a law of the Commonwealth in respect of which a court may impose a penalty of imprisonment for life, the court may, if the contrary intention does not appear and the court thinks it appropriate in all the circumstances of the case, impose, instead of, or in addition to, a penalty of imprisonment, a pecuniary penalty not exceeding 2,000 penalty units.

(3) Where a body corporate is convicted of an offence against a law of the Commonwealth, the court may, if the contrary intention does not appear and the court thinks fit, impose a pecuniary penalty not exceeding an amount equal to 5 times the amount of the maximum pecuniary penalty that could be imposed by the court on a natural person convicted of the same offence.

(3A) Where an Act (whether enacted before or after the commencement of this subsection) confers power to make an instrument (including rules, regulations or by-laws but not including a law of a Territory) and specifies the maximum pecuniary penalty that can be imposed for offences created by such an instrument, then:

  1. unless the contrary intention appears, the specified penalty is taken to be the maximum penalty that the instrument can prescribe for such offences by natural persons; and
  2. where a body corporate is convicted of such an offence--the specifying of that penalty is not to be treated as an indication of a contrary intention for the purposes of applying subsection (3).

(4) Where under a law of the Commonwealth any forfeiture, penalty or reparation is paid to a person aggrieved, it is payable to a body corporate where the body corporate is the person aggrieved.

11. Attachment C - Template Enforceable Undertaking

ENFORCEABLE UNDERTAKING
Personal Property Securities Act 2009
Section 230(2)

1. PARTIES

The commitments in this undertaking are offered to the Registrar of Personal Property Securities by:

[Name] [Address]

2. DEFINITIONS

In addition to terms defined elsewhere in this undertaking, the following definitions are used:

Registrar means the Registrar of Personal Property Securities.

PPS Act means the Personal Property Securities Act 2009 (Cth).

Person means the person who is offering the enforceable undertaking to the Registrar, as identified in Part 1 above.

3. BACKGROUND

3.1.Registrar's role

Under the PPS Act the Registrar is required to maintain the Personal Property Securities Register. The Registrar can refuse access to the PPS Register, suspend its operation, and conduct an investigation into any matter for the purpose of performing his or her functions.

3.2. Details of conduct

[paragraphs to be inserted]

3.3. Registrar's investigation/analysis

[paragraphs to be inserted]

3.4. Registrar's Concerns

[paragraphs to be inserted]

3.5. Acknowledgement of Registrar's Concerns

[paragraphs to be inserted]

4. UNDERTAKINGS

4.1. Under subsection 230(2) of the PPS Act the, the Person has offered, and the registrar has agreed to accept the following undertakings:

  1. [insert details of undertakings]
  2. [insert details of undertakings]
  3. The Person undertakes to pay the costs of the Person's compliance with this enforceable undertaking.
  4. The Person will provide all documents and information requested by Registrar from time to time for the purpose of assessing the Person's compliance with the terms of this enforceable undertaking.

5. ACKNOWLEDGMENTS

5.1. The Person acknowledges that the Registrar:

  1. may issue a media release on execution of this undertaking referring to its terms and to the concerns of the Registrar which led to its execution;
  2. may from time to time publicly refer to this undertaking; and
  3. will make this undertaking available for public inspection.

5.2. Further, the Person acknowledges that:

  1. the Registrar's acceptance of this undertaking does not affect the Registrar's power to investigate or pursue a criminal prosecution or seek a pecuniary penalty order in relation to any contravention not the subject of the background section of this enforceable undertaking or arising from future conduct;
  2. this undertaking in no way derogates from the rights and remedies available to any other person or entity arising from any conduct described in this undertaking or arising from future conduct; and
  3. this undertaking is enforceable at law, and the Person may face sanctions if it fails to abide by the undertakings detailed in the enforceable undertaking.

5.3. The Person acknowledges that this undertaking has no operative force until accepted by the Registrar, and the Person and Registrar acknowledge that the date of the enforceable undertaking is the date on which it is accepted by the Registrar.

[For an individual]*

Executed by:

_____________________[Name of the Person]

In the presence of:

_____________________[Name of witness]

[For a company]*

Executed by [the Person, ACN ] in accordance with section 127 of the Corporations Act 2001 (Cth):

_____________________ [Name of Director] Director

_____________________ [Name of Director/Secretary] Director/ Secretary

Accepted by the Registrar of Personal Property Securities under subsection 230(2) of the PPS Act by its duly authorised delegate:

_____________________
[name]

Delegate of Registrar of Personal Property Securities. [date]

* Execution clause may vary if the above clauses are not suitable.