Registration process
Section 85 – Order in which applications are to be dealt with
361.This section provides that the Keeper must deal with applications for registration of a statutory pledge, and applications for registration of an amendment to a statutory pledge, in the order in which they are received. The effect is to protect the priority of registration of, or amendments to, statutory pledges (and therefore the ranking rights in security as regards the encumbered property).
Section 86 – Application for registration of statutory pledge
362.Subsection (1) enables the secured creditor, and only the secured creditor (or the secured creditor’s agent – see section 120(4)), to apply to the Keeper for registration of a statutory pledge in the RSP.
363.Subsection (2) sets out that the Keeper must accept the application if it is submitted with a copy of the constitutive document, contains all the information the Keeper requires to make up an entry, conforms to RSP Rules, and the fee due to the Keeper is – or will be – paid. Rules can be made about information which can be redacted in the copy of the constitutive document which is submitted (see section 111(2)(d) and (e)).
364.Subsection (3) provides that the Keeper must reject an application if any of the requirements mentioned in subsection (2) are not satisfied.
Section 87 – Registration of statutory pledge
365.Subsection (1) provides that the Keeper must, on accepting an application, make up and maintain the appropriate entry in the RSP, which includes allocating a registration number (as defined in section 120(1) of the Act).
366.Subsection (2) provides that the statutory pledge is taken to be registered on the date and at the time originally entered for it. In other words, even if the registration of a statutory pledge is ineffective and becomes effective only once it is corrected (see section 91(3)), the date and time of registration of the statutory pledge will still be the date and time of the initial (i.e. ineffective) registration. However, it is the time of effective registration that is critical for matters such as creation or ranking (see sections 48 and 60).
Section 88 – Application for registration of amendment
367.This section makes the same provision in respect of an application for registration of an amendment of a statutory pledge as section 86 of the Act makes in respect of the application for registration of the pledge itself (the only change being that the relevant document is an amendment document rather than a constitutive document). See paragraphs 362 to 364 of these Notes.
368.An amendment to a statutory pledge may only be registered under this section where it is an amendment to add property to the encumbered property, or to increase the extent of the secured obligation in a case where the extent is clear in the original entry (see also the discussion at paragraph 272 of these Notes). As set out in more detail at section 58(6) and (7), an amendment which can be (and which requires to be) registered under this section takes effect only when registered effectively.
369.Although these are the only changes which can be registered as “amendments”, a pledge may be assigned in accordance with section 57 or restricted or discharged off-register by way of a written statement under section 59 of the Act. Other events may also lead to the pledge being extinguished off-register – for example, due to the encumbered property being destroyed, due to the property being acquired unencumbered under one of the Act’s good faith acquisition rules, due to the pledge being enforced, or due to the operation of the anti-avoidance rule under section 52. The RSP may be corrected for any such change by an application for a correction, if desired (see sections 96 to 99). The Keeper also has an obligation to correct the RSP in certain circumstances under section 100 upon becoming aware of a manifest inaccuracy in the RSP (and see section 101(1) of the Act for the meaning of “inaccuracy”).
Section 89 – Registration of amendment
370.Subsection (1) provides that the Keeper must, on accepting an application, revise the entry for the statutory pledge to which the application relates.
371.Subsection (2) has the same effect with regard to the timing of the registration of the amendment as section 87(2) has with regard to the pledge itself. See paragraph 366 of these Notes (but for cross-reference purposes, the relevant sections here are 92(3), 49 and 60).
Section 90 – Verification statement as to registration of statutory pledge or amendment
372.Subsection (1) provides that the Keeper must, after registering a statutory pledge or amending it, send a statement to the secured creditor (i.e. the applicant) and the provider verifying what has been done – but only if the application contains email addresses for them. If an email address has not been included for either the secured creditor or the provider then there is no obligation on the Keeper to send that person a statement. Subsection (2) makes provision about the content of the statement.
373.As the application will have been made by the secured creditor, it can be assumed that they will provide their correct email address. However, the correct email address may not be given for the provider. In circumstances where the provider does not receive a verification statement from the Keeper (for example, because no email address was provided by the secured creditor or the email address provided was incorrect), the provider may, under subsection (3), request a copy of the verification statement from the secured creditor. Under subsection (4), the secured creditor must supply the copy within 21 days.
